While GARCH(1,1) attempts to capture volatility dynamics and volatility decay - the VIX, in contrast captures an ex ante measure of volatility that is embedded in options. Volatility measures the amplitude of price movements that a financial instrument experiences over a given period of time. The more intense the price swings in that instrument, the higher the level of volatility. Volatility can be measured using actual historical price changes (realized volatility) or it can be a measure of expected future volatility that is implied by option prices.
The VIX Index is a measure of expected future implied volatility. Created by the Chicago Board Options Exchange (CBOE), the Volatility Index, is a real-time market index that calibrates the market's expectation of 30-day forward-looking volatility. This in turn can be traded in its own right as a underlying in a another futures or option contract. If this seems complicated then yes true - it is. Nevertheless, we can break down the estimation and follow a relatively simplified cookbook. Here, I follow Arnold and Earl (2007) who put together a relatively uncomplicated spreadsheet with Jamie Oliver parsimony. Some time functions and vlookup are introduced but you are spared any vestige of VBA in that paper.
Derived from the price inputs of the S&P 500 index options, it provides a measure of market sentiment. The VIX is often referred to as the "Fear Gauge" or "Fear Index." Investors, research analysts and portfolio managers look to VIX values as a way to gauge market stress and is popular among journalists when imbibing the modern day bogeyman. Link to spreadsheet.
For those of you who prefer a VBA automated spreadsheet - you should consider the Rouah and Vainberg (2006) text: Option Pricing Models and Volatility. In the third video I include a reference to their Excel VBA generated estimation.