Sm Energy Co Stock Volatility
| SM Stock | USD 45.46 0.70 1.56% |
SM Energy retains Efficiency (Sharpe Ratio) of -0.0045, which indicates the firm had a -0.0045% return per unit of price deviation over the last 3 months. SM Energy exposes twenty-nine different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please validate SM Energy's Mean Deviation of 1.95, downside deviation of 2.94, and Risk Adjusted Performance of 0.0247 to confirm the risk estimate we provide. Key indicators related to SM Energy's volatility include:
180 Days Market Risk | Chance Of Distress | 180 Days Economic Sensitivity |
SM Energy 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 SM Energy daily returns, and it is calculated using variance and standard deviation. We also use SM Energy's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of SM Energy volatility.
SM Energy |
ESG Sustainability
While most ESG disclosures are voluntary, SM Energy's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to SM Energy's managers and investors.Environmental | Governance | Social |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as SM Energy can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of SM Energy at lower prices. For example, an investor can purchase SM Energy stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of SM Energy's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving together with SM Energy Stock
SM Energy Market Sensitivity And Downside Risk
SM Energy's beta coefficient measures the volatility of SM Energy 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 SM Energy stock's returns against your selected market. In other words, SM Energy's beta of 1.18 provides an investor with an approximation of how much risk SM Energy stock can potentially add to one of your existing portfolios. SM Energy Co currently demonstrates below-average downside deviation. It has Information Ratio of -0.01 and Jensen Alpha of -0.05. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure SM Energy'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 SM Energy'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 SM Energy Demand TrendCheck current 90 days SM Energy correlation with market (Dow Jones Industrial)SM Energy Beta |
SM Energy 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 | 2.55 |
It is essential to understand the difference between upside risk (as represented by SM Energy's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of SM Energy's daily returns or price. Since the actual investment returns on holding a position in sm energy 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 SM Energy.
SM Energy Stock Volatility Analysis
Volatility refers to the frequency at which SM Energy stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with SM Energy's price changes. Investors will then calculate the volatility of SM Energy'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 SM Energy's volatility:
Historical Volatility
This type of stock volatility measures SM Energy's fluctuations based on previous trends. It's commonly used to predict SM Energy'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 SM Energy'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 SM Energy'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. SM Energy 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.
SM Energy Projected Return Density Against Market
Allowing for the 90-day total investment horizon the stock has the beta coefficient of 1.1794 . This usually implies as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, SM Energy 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 SM Energy 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 SM Energy'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 SM Energy 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.
SM Energy Co 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 a SM Energy 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.SM Energy Stock Risk Measures
Allowing for the 90-day total investment horizon the coefficient of variation of SM Energy is -22186.71. The daily returns are distributed with a variance of 6.51 and standard deviation of 2.55. The mean deviation of SM Energy Co is currently at 1.98. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.75
α | Alpha over Dow Jones | -0.05 | |
β | Beta against Dow Jones | 1.18 | |
σ | Overall volatility | 2.55 | |
Ir | Information ratio | -0.01 |
SM Energy Stock Return Volatility
SM Energy historical daily return volatility represents how much of SM Energy stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 2.5522% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7668% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About SM Energy Volatility
Volatility is a rate at which the price of SM Energy 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 SM Energy may increase or decrease. In other words, similar to SM Energy's beta indicator, it measures the risk of SM Energy and helps estimate the fluctuations that may happen in a short period of time. So if prices of SM Energy 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.| Last Reported | Projected for Next Year | ||
| Selling And Marketing Expenses | 53.5 M | 47.6 M | |
| Market Cap | 2.4 B | 2.5 B |
SM Energy'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 SM Energy Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much SM Energy's price varies over time.
3 ways to utilize SM Energy's volatility to invest better
Higher SM Energy's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of SM Energy 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. SM Energy 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 SM Energy investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in SM Energy'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 SM Energy's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
SM Energy Investment Opportunity
SM Energy Co has a volatility of 2.55 and is 3.31 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of SM Energy Co is lower than 22 percent of all global equities and portfolios over the last 90 days. You can use SM Energy Co to enhance the returns of your portfolios. The stock experiences a large bullish trend. Check odds of SM Energy to be traded at $50.01 in 90 days.Weak diversification
The correlation between SM Energy Co and DJI is 0.35 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding SM Energy Co and DJI in the same portfolio, assuming nothing else is changed.
SM Energy Additional Risk Indicators
The analysis of SM Energy'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 SM Energy's investment and either accepting that risk or mitigating it. Along with some common measures of SM Energy 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 | 0.0247 | |||
| Market Risk Adjusted Performance | 0.0521 | |||
| Mean Deviation | 1.95 | |||
| Semi Deviation | 2.87 | |||
| Downside Deviation | 2.94 | |||
| Coefficient Of Variation | 4261.14 | |||
| Standard Deviation | 2.54 |
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.
SM Energy 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 SM Energy 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. SM Energy'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, SM Energy'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 SM Energy Co.
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in SM Energy Co. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in population. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Is Oil & Gas Exploration & Production 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 SM Energy. If investors know SM Energy 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 SM Energy listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.112 | Dividend Share 0.74 | Earnings Share 7.14 | Revenue Per Share 20.3 | Quarterly Revenue Growth (0.04) |
The market value of SM Energy is measured differently than its book value, which is the value of SM Energy that is recorded on the company's balance sheet. Investors also form their own opinion of SM Energy's value that differs from its market value or its book value, called intrinsic value, which is SM Energy'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 SM Energy's market value can be influenced by many factors that don't directly affect SM Energy'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 SM Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if SM Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, SM Energy'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.