Battalion Oil Corp Stock Volatility
| BATL Stock | USD 3.50 0.36 11.46% |
Battalion Oil is extremely dangerous given 3 months investment horizon. Battalion Oil Corp secures Sharpe Ratio (or Efficiency) of 0.0577, which signifies that the company had a 0.0577% return per unit of risk over the last 3 months. We were able to interpolate and analyze data for thirty different technical indicators, which can help you to evaluate if expected returns of 1.0% are justified by taking the suggested risk. Use Battalion Oil Downside Deviation of 10.26, risk adjusted performance of 0.0535, and Mean Deviation of 5.11 to evaluate company specific risk that cannot be diversified away. Key indicators related to Battalion Oil's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Battalion Oil Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Battalion daily returns, and it is calculated using variance and standard deviation. We also use Battalion's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Battalion Oil volatility.
Battalion |
Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Battalion Oil at lower prices. For example, an investor can purchase Battalion stock that has halved in price over a short period. This will lower their average cost per share, thereby improving the overall portfolio performance when market normalizes.
Moving against Battalion Stock
| 0.39 | VTLE | Vital Energy | PairCorr |
| 0.35 | SD | SandRidge Energy | PairCorr |
| 0.31 | BTE | Baytex Energy Corp Aggressive Push | PairCorr |
Battalion Oil Market Sensitivity And Downside Risk
Battalion Oil's beta coefficient measures the volatility of Battalion stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Battalion stock's returns against your selected market. In other words, Battalion Oil's beta of 5.09 provides an investor with an approximation of how much risk Battalion Oil stock can potentially add to one of your existing portfolios. Battalion Oil Corp is showing large volatility of returns over the selected time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Battalion Oil's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Battalion Oil's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Battalion Oil Corp Demand TrendCheck current 90 days Battalion Oil correlation with market (Dow Jones Industrial)Battalion Beta |
Battalion standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 17.26 |
It is essential to understand the difference between upside risk (as represented by Battalion Oil's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Battalion Oil's daily returns or price. Since the actual investment returns on holding a position in battalion stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Battalion Oil.
Battalion Oil Corp Stock Volatility Analysis
Volatility refers to the frequency at which Battalion Oil stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Battalion Oil's price changes. Investors will then calculate the volatility of Battalion Oil's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Battalion Oil's volatility:
Historical Volatility
This type of stock volatility measures Battalion Oil's fluctuations based on previous trends. It's commonly used to predict Battalion Oil's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Battalion Oil's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Battalion Oil's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Battalion Oil Corp Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Battalion Oil Projected Return Density Against Market
Given the investment horizon of 90 days the stock has the beta coefficient of 5.0874 suggesting as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Battalion Oil will likely underperform.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Battalion Oil or Oil, Gas & Consumable Fuels sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Battalion Oil's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Battalion stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Battalion Oil Corp has an alpha of 0.4791, implying that it can generate a 0.48 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Battalion Oil Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Battalion Oil Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Battalion Oil is 1733.85. The daily returns are distributed with a variance of 297.75 and standard deviation of 17.26. The mean deviation of Battalion Oil Corp is currently at 5.11. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.76
α | Alpha over Dow Jones | 0.48 | |
β | Beta against Dow Jones | 5.09 | |
σ | Overall volatility | 17.26 | |
Ir | Information ratio | 0.05 |
Battalion Oil Stock Return Volatility
Battalion Oil historical daily return volatility represents how much of Battalion Oil stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company inherits 17.2555% risk (volatility on return distribution) over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7608% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Battalion Oil Volatility
Volatility is a rate at which the price of Battalion Oil or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Battalion Oil may increase or decrease. In other words, similar to Battalion's beta indicator, it measures the risk of Battalion Oil and helps estimate the fluctuations that may happen in a short period of time. So if prices of Battalion Oil fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.Battalion Oil Corporation, an independent energy company, engages in the acquisition, production, exploration, and development of onshore oil and natural gas assets in the United States. Battalion Oil Corporation was founded in 1987 and is headquartered in Houston, Texas. Battalion Oil operates under Oil Gas EP classification in the United States and is traded on AMEX Exchange. It employs 58 people.
Battalion Oil's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Battalion Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Battalion Oil's price varies over time.
3 ways to utilize Battalion Oil's volatility to invest better
Higher Battalion Oil's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Battalion Oil Corp stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Battalion Oil Corp stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Battalion Oil Corp investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Battalion Oil's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Battalion Oil's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Battalion Oil Investment Opportunity
Battalion Oil Corp has a volatility of 17.26 and is 22.71 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Battalion Oil Corp is higher than 96 percent of all global equities and portfolios over the last 90 days. You can use Battalion Oil Corp to enhance the returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Battalion Oil to be traded at $4.38 in 90 days.Modest diversification
The correlation between Battalion Oil Corp and DJI is 0.23 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Battalion Oil Corp and DJI in the same portfolio, assuming nothing else is changed.
Battalion Oil Additional Risk Indicators
The analysis of Battalion Oil's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Battalion Oil's investment and either accepting that risk or mitigating it. Along with some common measures of Battalion Oil stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0535 | |||
| Market Risk Adjusted Performance | 0.2037 | |||
| Mean Deviation | 5.11 | |||
| Semi Deviation | 7.68 | |||
| Downside Deviation | 10.26 | |||
| Coefficient Of Variation | 1733.85 | |||
| Standard Deviation | 17.26 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Battalion Oil Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Battalion Oil as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Battalion Oil's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Battalion Oil's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Battalion Oil Corp.
When determining whether Battalion Oil Corp is a strong investment it is important to analyze Battalion Oil's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Battalion Oil's future performance. For an informed investment choice regarding Battalion Stock, refer to the following important reports: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Battalion Oil Corp. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in estimate. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Is Petroleum and Natural Gas space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Battalion Oil. If investors know Battalion will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Battalion Oil listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Battalion Oil Corp is measured differently than its book value, which is the value of Battalion that is recorded on the company's balance sheet. Investors also form their own opinion of Battalion Oil's value that differs from its market value or its book value, called intrinsic value, which is Battalion Oil's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Battalion Oil's market value can be influenced by many factors that don't directly affect Battalion Oil's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Battalion Oil's value and its price as these two are different measures arrived at by different means. Investors typically determine if Battalion Oil is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Battalion Oil's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.