The company has a beta of 0.7222. Let's try to break down what Holly's beta means in this case. Holly Energy returns are very sensitive to returns on the market. As the market goes up or down, Holly Energy is expected to follow. The beta indicator helps investors understand whether Holly Energy moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Holly deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Holly Energy Partners. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Predictive Modules for Holly Energy
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Holly Energy's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Holly Energy. Your research has to be compared to or analyzed against Holly Energy's peers to derive any actionable benefits. When done correctly, Holly Energy's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Holly Energy Partners.
How important is Holly Energy's Liquidity
Holly Energy
financial leverage refers to using borrowed capital as a funding source to finance Holly Energy Partners ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Holly Energy financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Holly Energy's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Holly Energy's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Holly Energy's total debt and its cash.
What is driving Holly Energy Investor Appetite?
The recent indifference towards the small price fluctuations of Holly Energy may raise some interest from insiders. The stock closed today at a share price of
18.24 on very low momentum in trading volume. The company executives did not add any value to Holly Energy Partners investors in
April. However, most investors can still diversify their portfolios with Holly Energy to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.3. The current volatility is consistent with the ongoing market swings in
April 2022 as well as with Holly Energy Partners unsystematic, company-specific events.
Returns Breakdown
| Return on Assets | 0.0939 |
| Return on Equity | 0.46 |
| Return Capital | 0.0798 |
| Return on Sales | 0.58 |
Will Holly Energy recent roll up continue?
The potential upside is down to 3.93 as of today. Holly Energy Partners exhibits very low volatility with skewness of 0.26 and kurtosis of -0.52. However, we advise investors to further study Holly Energy Partners technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Holly Energy's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Holly 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 stocks as prices fall.
Holly Energy Implied Volatility
Holly Energy's implied volatility exposes the market's sentiment of Holly Energy Partners stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Holly Energy's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Holly Energy stock will not fluctuate a lot when Holly Energy's options are near their expiration.
Our Final Take On Holly Energy
Although other entities within the oil & gas midstream industry are still a little expensive, even after the recent corrections, Holly Energy may offer a potential longer-term growth to insiders. While some insiders may not share our view, we believe it may be a good time to increase your existing holdings in Holly. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Holly Energy.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Holly Energy Partners. Please refer to our
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