The model has five parameters: the initial variance, the long-run variance, the speed of mean reversion, the volatility of variance, and the correlation between the stock price and the variance. The correlation is usually set to a negative value, so that the variance rises when the stock price falls. Together with the volatility of variance, it shapes the slope and curvature of the volatility smile.
Consider a hypothetical example with an initial and long-run variance of 0.04 (20% volatility), a mean-reversion speed of 2, a volatility of variance of 0.3, and a correlation of −0.7. For a one-year call, the implied volatility is about 22.4% at a strike of 80 and about 16.7% at a strike of 120. With a correlation of 0.7, the two levels are reversed.
Unlike the constant volatility of the Black-Scholes model, the variance moves, so a stock and a deposit alone cannot replicate the variance risk. A price from the model is a value under assumptions such as the price of variance risk.