American Electric Power Stock Volatility
| AEP Stock | USD 134.73 -0.35 -0.26% |
Sharpe Ratio = 0.2007
| Leading Returns | Top Quartile | |||
| Strong | ||||
| Moderate | ||||
| Modest | AEP | |||
| Cash | Low | Moderate | Elevated | High |
| Below Benchmark |
For American Electric Power, recent data highlights a Market Risk Adjusted Performance of -13.0%, a Risk of 1.14, and a Risk Adjusted Performance of 0.2%. Moving average data positions the stock near 15% of its recent return envelope.
Key indicators related to American Electric's volatility include:90 Days Market Risk | Chance Of Distress | 90 Days Economic Sensitivity |
Key risk metrics for American Electric (3 Months):
Beta -0.02 | Alpha 0.22 | Risk 1.14 | Sharpe Ratio 0.2 | Expected Return 0.23 |
Moving together with American Stock
Moving Against American Stock
| 0.52 | STI | Solidion Technology | PairCorr |
| 0.49 | CMSA | CMS Energy Corp | PairCorr |
| 0.34 | SOJE | Southern Company | PairCorr |
Sensitivity To Market
The beta coefficient of -0.0168 for American Electric Power measures how its returns respond to broader market changes. In regression terms, beta captures the slope between asset returns and index returns. Historical volatility is currently near 1.14%. This analysis separates observed movement from interpretation for American Electric Power. Standard deviation (1.14%) and downside deviation (1.05%) describe the range without implying direction. Equity volatility compresses in calm markets and expands quickly when uncertainty increases. Stock dispersion changes materially during earnings seasons and macro data releases.
3 Months Beta |American Electric Power Demand TrendCurrent 90-day American Electric correlation with market (Dow Jones Industrial)Downside Risk
American standard deviation over the selected horizon reflects the magnitude of daily price swings relative to the historical average. A rising standard deviation for American over successive periods signals increasing price uncertainty.
Standard Deviation | 1.14 |
Understanding the asymmetry between upside and downside risk is critical for American Electric analysis. Total price dispersion includes upside, while downside deviation captures only loss risk in American Electric's returns. For American Electric Power, recent data highlights a Downside Deviation of 1.05, a Downside Variance of 1.11, and a Maximum Drawdown of 5.80.
Stock Volatility Analysis
Volatility is a statistical measure of the dispersion of American Electric stock returns over a given period of time. Volatility measures how much American Electric's stock price deviates from its average over a period.
Transformation |
This analysis covers sixty-one data points across the selected time horizon. The Average Price transformation calculates the mean of American Electric Power's open, high, low, and close for each trading period. By incorporating all four price components equally, it provides a balanced representation of each period's trading activity. Compared to using the closing price alone, the average price reduces the influence of end-of-day positioning and can serve as a smoother input for other technical indicators.
Projected Return Density Against Market
Over a 90-day investment horizon, American Electric Power has a beta of -0.0168. This suggests that as returns on the benchmark increase, returns on American Electric tend to move in the opposite direction, though by a smaller magnitude. During a bear market, however, American Electric Power tends to outperform the market.American Electric carries exposure to broad market movements as well as company or sector-specific developments. While portfolio diversification can reduce asset-level risk, systematic volatility cannot be avoided. Standard deviation and beta quantify this exposure. For American Electric Power, recent data highlights a Downside Deviation of 1.05, a Mean Deviation of 0.86, and a Semi Deviation of 0.83.
Predicted Return Distribution |
| Density |
What Drives American Electric's Price Volatility?
Industry Dynamics
Competitive pressure, margin shifts, or structural changes in the Electric Utilities sector can alter American Electric's day-to-day volatility profile.Political and Economic Environment
Broad market tone, policy uncertainty, and recession or expansion signals shape volatility conditions for American Electric.American Electric's Company-Specific Factors
Unexpected business updates, leadership changes, or legal outcomes can drive outsized moves in American Electric's stock.Stock Risk Measures
Over a 90-day investment horizon, the coefficient of variation of American Electric is 498.27. The daily returns are distributed with a variance of 1.31 and standard deviation of 1.14. The mean deviation of American Electric Power is currently at 0.86. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.94
α | Alpha over Dow Jones | 0.22 | |
β | Beta against Dow Jones | -0.0168 | |
σ | Overall volatility | 1.14 | |
Ir | Information ratio | 0.19 |
Stock Return Volatility
Volatility for American Electric quantifies the day-to-day dispersion of stock returns around their historical average. The company carries 1.143% return volatility across the 90-day horizon. As a benchmark, Dow Jones Industrial reported 0.9502% volatility on return distribution over a 90-day investment horizon. Performance |
| Timeline |
Related Correlations Analysis
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Correlation Matchups
Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.High positive correlations
| High negative correlations
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Risk-Adjusted Indicators
Headline performance for American Stock may not fully reflect how the business compares across its competitive set. Peer-relative risk metrics add context on drawdown behavior, consistency, and return quality. These indicators are quantitative in nature and measure volatility and risk-adjusted expected returns across different positions.| Mean Deviation | Jensen Alpha | Sortino Ratio | Treynor Ratio | Semi Deviation | Expected Shortfall | Potential Upside | Value @Risk | Maximum Drawdown | ||
|---|---|---|---|---|---|---|---|---|---|---|
| NGG | 1.06 | 0.09 | 0.06 | 0.18 | 1.43 | 2.16 | 6.26 | |||
| EXC | 1.00 | 0.08 | 0.06 | -0.50 | 1.18 | 1.63 | 10.26 | |||
| D | 0.90 | 0.05 | 0.05 | 0.52 | 1.13 | 2.14 | 5.01 | |||
| XEL | 0.92 | 0.06 | 0.05 | 1.56 | 1.05 | 2.09 | 6.77 | |||
| ETR | 1.05 | 0.27 | 0.22 | 10.97 | 0.95 | 2.47 | 8.95 | |||
| SRE | 0.87 | 0.13 | 0.10 | 1.49 | 1.11 | 1.90 | 6.25 | |||
| VST | 2.24 | 0.09 | 0.02 | 0.15 | 3.82 | 4.33 | 17.78 | |||
| PEG | 1.01 | 0.03 | 0.02 | 0.20 | 1.42 | 1.73 | 6.53 | |||
| ED | 0.88 | 0.08 | 0.08 | -0.27 | 0.94 | 1.79 | 4.13 | |||
| DUK | 0.80 | 0.10 | 0.11 | -0.50 | 0.90 | 1.58 | 4.78 |
Risk Metrics, Assumptions & Methodology
Beta for American Electric measures the share of volatility attributable to broad market movements versus company-specific factors. A beta above one indicates amplified sensitivity to market swings, increasing both upside and downside exposure. American Electric has a market cap of 73.42 B, P/E of 20.02, ROE of 12.49%.
American Electric Power data is compiled from periodic company reporting and market reference feeds and standardized for comparability. Volatility and downside metrics are estimated from historical return dispersion.
Editorial review and methodology oversight provided by: Ellen Johnson, Member of Macroaxis Editorial Board
American Electric Volatility Profile Summary
Recent data suggests that American Electric Power is more volatile than Dow Jones Industrial by approximately 1.2x over the selected horizon. This differential reflects the relative dispersion of returns and frames how the asset responds to broader market conditions. Observed price behavior indicates modest directional movement within the current volatility regime. Across the current 90-day horizon, that places the security below 10% of the broader equity and portfolio universe on a pure volatility basis. This positioning reflects relative dispersion compared to peers rather than extreme instability.American Electric Power exhibits characteristics that tend to dampen sensitivity to smaller market fluctuations within the current volatility regime. This directional read frames the latest price swing through a simple momentum and follow-through lens. It works best as a directional cue rather than as a standalone forecast. Observed price behavior reflects modest downward movement with limited trading activity. Return distributions derived from historical modeling outline a range of potential outcomes over the selected 90-day horizon. View American Electric probability analysis.
Strong inverse diversification
Across the chosen horizon, American Electric and Dow Jones show a correlation of -0.28 and fall into the Strong inverse diversification bucket. This chart measures the degree of risk overlap between American Electric and Dow Jones.
American Electric Additional Risk Indicators
Risk analysis around American Electric Power gains depth when secondary indicators confirm, refine, or challenge the basic volatility picture. A thorough risk review clarifies whether current exposure warrants maintenance, reduction, or offset elsewhere in the portfolio.
| Risk Adjusted Performance | 0.1899 | |||
| Market Risk Adjusted Performance | -13.05 | |||
| Mean Deviation | 0.8605 | |||
| Semi Deviation | 0.8289 | |||
| Downside Deviation | 1.05 | |||
| Coefficient Of Variation | 498.27 | |||
| Standard Deviation | 1.14 |
American Electric Suggested Diversification Pairs
A paired position built around American Electric Power reduces directional market exposure while expressing a relative-value view. Pair trading is less about prediction in isolation and more about identifying relative mispricing between related positions.
Risk reduction through pair trading is real but has limits - not every type of exposure can be offset by a second leg. American Electric's exposure to overall market risk stays intact regardless of pairing. The value of a second leg lies in reducing American Electric's idiosyncratic risk - the part that comes from company-level events rather than macro conditions.
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