Elkem ASA (Norway) Volatility
| ELK Stock | NOK 16.87 0.04 0.24% |
Elkem ASA secures Sharpe Ratio (or Efficiency) of -0.11, which denotes the company had a -0.11 % return per unit of risk over the last 3 months. Elkem ASA exposes twenty-two different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please confirm Elkem ASA's Variance of 2.6, mean deviation of 1.18, and Standard Deviation of 1.61 to check the risk estimate we provide. Key indicators related to Elkem ASA's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Elkem ASA 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 Elkem daily returns, and it is calculated using variance and standard deviation. We also use Elkem's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Elkem ASA volatility.
Elkem |
Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Elkem ASA at lower prices. For example, an investor can purchase Elkem 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 Elkem Stock
Elkem ASA Market Sensitivity And Downside Risk
Elkem ASA's beta coefficient measures the volatility of Elkem 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 Elkem stock's returns against your selected market. In other words, Elkem ASA's beta of -0.34 provides an investor with an approximation of how much risk Elkem ASA stock can potentially add to one of your existing portfolios. Elkem ASA exhibits very low volatility with skewness of -1.06 and kurtosis of 2.73. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Elkem ASA'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 Elkem ASA'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 Elkem ASA Demand TrendCheck current 90 days Elkem ASA correlation with market (Dow Jones Industrial)Elkem Beta |
Elkem 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 | 1.64 |
It is essential to understand the difference between upside risk (as represented by Elkem ASA's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Elkem ASA's daily returns or price. Since the actual investment returns on holding a position in elkem 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 Elkem ASA.
Elkem ASA Stock Volatility Analysis
Volatility refers to the frequency at which Elkem ASA stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Elkem ASA's price changes. Investors will then calculate the volatility of Elkem ASA'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 Elkem ASA's volatility:
Historical Volatility
This type of stock volatility measures Elkem ASA's fluctuations based on previous trends. It's commonly used to predict Elkem ASA'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 Elkem ASA'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 Elkem ASA'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. Elkem ASA 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.
Elkem ASA Projected Return Density Against Market
Assuming the 90 days trading horizon Elkem ASA has a beta of -0.3391 suggesting as returns on the benchmark increase, returns on holding Elkem ASA are expected to decrease at a much lower rate. During a bear market, however, Elkem ASA is likely to outperform the market.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 Elkem ASA or Chemicals 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 Elkem ASA'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 Elkem 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.
Elkem ASA has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the Dow Jones Industrial. Predicted Return Density |
| Returns |
What Drives an Elkem ASA 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.Elkem ASA Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Elkem ASA is -913.31. The daily returns are distributed with a variance of 2.67 and standard deviation of 1.64. The mean deviation of Elkem ASA is currently at 1.2. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.84
α | Alpha over Dow Jones | -0.16 | |
β | Beta against Dow Jones | -0.34 | |
σ | Overall volatility | 1.64 | |
Ir | Information ratio | -0.12 |
Elkem ASA Stock Return Volatility
Elkem ASA historical daily return volatility represents how much of Elkem ASA stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company assumes 1.6355% volatility of returns over the 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.8471% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Elkem ASA Volatility
Volatility is a rate at which the price of Elkem ASA 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 Elkem ASA may increase or decrease. In other words, similar to Elkem's beta indicator, it measures the risk of Elkem ASA and helps estimate the fluctuations that may happen in a short period of time. So if prices of Elkem ASA 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.Elkem ASA manufactures and sells metals and materials in Norway and internationally. Elkem ASA is a subsidiary of Bluestar Elkem International Co., Ltd. ELKEM ASA operates under Specialty Chemicals classification in Norway and is traded on Oslo Stock Exchange. It employs 6280 people.
Elkem ASA'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 Elkem Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Elkem ASA's price varies over time.
3 ways to utilize Elkem ASA's volatility to invest better
Higher Elkem ASA's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Elkem ASA 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. Elkem ASA 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 Elkem ASA investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Elkem ASA'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 Elkem ASA's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Elkem ASA Investment Opportunity
Elkem ASA has a volatility of 1.64 and is 1.93 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Elkem ASA is lower than 14 percent of all global equities and portfolios over the last 90 days. You can use Elkem ASA to enhance the returns of your portfolios. The stock experiences a normal upward fluctuation. Check odds of Elkem ASA to be traded at 17.71 in 90 days.Good diversification
The correlation between Elkem ASA and DJI is -0.18 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and DJI in the same portfolio, assuming nothing else is changed.
Elkem ASA Additional Risk Indicators
The analysis of Elkem ASA'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 Elkem ASA's investment and either accepting that risk or mitigating it. Along with some common measures of Elkem ASA 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 | (0.08) | |||
| Market Risk Adjusted Performance | 0.509 | |||
| Mean Deviation | 1.18 | |||
| Coefficient Of Variation | (1,014) | |||
| Standard Deviation | 1.61 | |||
| Variance | 2.6 | |||
| Information Ratio | (0.12) |
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.
Elkem ASA 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 Elkem ASA 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. Elkem ASA'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, Elkem ASA'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 Elkem ASA.
Other Information on Investing in Elkem Stock
Elkem ASA financial ratios help investors to determine whether Elkem Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Elkem with respect to the benefits of owning Elkem ASA security.