Honeywell International (Germany) Volatility
| ALD Stock | 219.45 0.40 0.18% |
Honeywell International appears to be very steady, given 3 months investment horizon. Honeywell International holds Efficiency (Sharpe) Ratio of 0.21, which attests that the entity had a 0.21% return per unit of risk over the last 3 months. We have found thirty technical indicators for Honeywell International, which you can use to evaluate the volatility of the firm. Please utilize Honeywell International's Market Risk Adjusted Performance of 0.5938, downside deviation of 1.32, and Risk Adjusted Performance of 0.1752 to validate if our risk estimates are consistent with your expectations. Key indicators related to Honeywell International's volatility include:
390 Days Market Risk | Chance Of Distress | 390 Days Economic Sensitivity |
Honeywell International 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 Honeywell daily returns, and it is calculated using variance and standard deviation. We also use Honeywell's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Honeywell International volatility.
Honeywell |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Honeywell International 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 Honeywell International at lower prices. For example, an investor can purchase Honeywell 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 Honeywell International'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 against Honeywell Stock
| 0.83 | MBI | Mitsubishi | PairCorr |
| 0.83 | BYRA | PT Bank Rakyat | PairCorr |
| 0.81 | BYRA | BANK RAKYAT IND | PairCorr |
| 0.78 | PQ9 | PT Bank Mandiri | PairCorr |
| 0.78 | PQ9 | BANK MANDIRI | PairCorr |
| 0.77 | PQ9 | BANK MANDIRI | PairCorr |
| 0.73 | BYRA | BANK RAKYAT IND | PairCorr |
| 0.71 | PQ9 | BANK MANDIRI | PairCorr |
| 0.68 | BYRA | PT Bank Rakyat | PairCorr |
Honeywell International Market Sensitivity And Downside Risk
Honeywell International's beta coefficient measures the volatility of Honeywell 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 Honeywell stock's returns against your selected market. In other words, Honeywell International's beta of 0.51 provides an investor with an approximation of how much risk Honeywell International stock can potentially add to one of your existing portfolios. Honeywell International has relatively low volatility with skewness of 0.17 and kurtosis of 2.34. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Honeywell International'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 Honeywell International'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 Honeywell International Demand TrendCheck current 90 days Honeywell International correlation with market (Dow Jones Industrial)Honeywell Beta |
Honeywell 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 | 1.41 |
It is essential to understand the difference between upside risk (as represented by Honeywell International's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Honeywell International's daily returns or price. Since the actual investment returns on holding a position in honeywell 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 Honeywell International.
Honeywell International Stock Volatility Analysis
Volatility refers to the frequency at which Honeywell International stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Honeywell International's price changes. Investors will then calculate the volatility of Honeywell International'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 Honeywell International's volatility:
Historical Volatility
This type of stock volatility measures Honeywell International's fluctuations based on previous trends. It's commonly used to predict Honeywell International'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 Honeywell International'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 Honeywell International'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. Honeywell International 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.
Honeywell International Projected Return Density Against Market
Assuming the 90 days trading horizon Honeywell International has a beta of 0.5057 . This suggests as returns on the market go up, Honeywell International average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Honeywell International will be expected to be much smaller as well.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 Honeywell International or Industrials 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 Honeywell International'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 Honeywell 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.
Honeywell International has an alpha of 0.284, implying that it can generate a 0.28 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Honeywell International 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.Honeywell International Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Honeywell International is 484.32. The daily returns are distributed with a variance of 2.0 and standard deviation of 1.41. The mean deviation of Honeywell International is currently at 1.0. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.79
α | Alpha over Dow Jones | 0.28 | |
β | Beta against Dow Jones | 0.51 | |
σ | Overall volatility | 1.41 | |
Ir | Information ratio | 0.19 |
Honeywell International Stock Return Volatility
Honeywell International historical daily return volatility represents how much of Honeywell International stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 1.4145% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7982% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Honeywell International Volatility
Volatility is a rate at which the price of Honeywell International 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 Honeywell International may increase or decrease. In other words, similar to Honeywell's beta indicator, it measures the risk of Honeywell International and helps estimate the fluctuations that may happen in a short period of time. So if prices of Honeywell International 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.3 ways to utilize Honeywell International's volatility to invest better
Higher Honeywell International's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Honeywell International 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. Honeywell International 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 Honeywell International investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Honeywell International'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 Honeywell International's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Honeywell International Investment Opportunity
Honeywell International has a volatility of 1.41 and is 1.76 times more volatile than Dow Jones Industrial. 12 percent of all equities and portfolios are less risky than Honeywell International. You can use Honeywell International to enhance the returns of your portfolios. The stock experiences a normal upward fluctuation. Check odds of Honeywell International to be traded at 230.42 in 90 days.Modest diversification
The correlation between Honeywell International and DJI is 0.28 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and DJI in the same portfolio, assuming nothing else is changed.
Honeywell International Additional Risk Indicators
The analysis of Honeywell International'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 Honeywell International's investment and either accepting that risk or mitigating it. Along with some common measures of Honeywell International 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 | 0.1752 | |||
| Market Risk Adjusted Performance | 0.5938 | |||
| Mean Deviation | 1.01 | |||
| Semi Deviation | 0.9674 | |||
| Downside Deviation | 1.32 | |||
| Coefficient Of Variation | 463.84 | |||
| Standard Deviation | 1.42 |
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.
Honeywell International 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 Honeywell International 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. Honeywell International'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, Honeywell International'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 Honeywell International.
Additional Tools for Honeywell Stock Analysis
When running Honeywell International's price analysis, check to measure Honeywell International's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Honeywell International is operating at the current time. Most of Honeywell International's value examination focuses on studying past and present price action to predict the probability of Honeywell International's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Honeywell International's price. Additionally, you may evaluate how the addition of Honeywell International to your portfolios can decrease your overall portfolio volatility.