This formula omits some important parts.
- This gives an absolute number which doesn't mention or care if the stock will go up or down by that number.
- It's entirely useless for predicting the future value of the stock. It's used for the pricing of derivatives such as options, and for showing how risky/volatile the stock is.
- It's missing the second part, which is about interest rate and about how much we expect the value of the stock to increase.
The formula assumes that the price of the stock moves a little bit each day. So the more days you have the more it moves. That's what the Number of Calendar Days is for. Some of these moves will cancel each other out, that's what the square root is for. What's remaining is really just a magic number.
The stock price and sqrt(365) are there because that's how Implied Volatility is defined. Implied Volatility is a number that measures how much/often a price changes, in this case over a year (that's where the 365 comes from), and relative to the value of the stock (that's why we multiply by the value of the stock).
Implied Volatility instead of just Volatility means we derive volatility by locking at past prices of the stock. One way to do that is to use the same formula backwards.
The missing part about interest rate is really just a prediction of how much we except the value of the stock to increase, on average, which is just a bog standard high school compound interest calculation.