British Stock Volatility

BTI -  USA Stock  

USD 43.11  0.26  0.61%

British American Tobacco secures Sharpe Ratio (or Efficiency) of -0.0319, which signifies that the company had -0.0319% of return per unit of risk over the last 3 months. Macroaxis standpoint towards foreseeing the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. British American Tobacco exposes twenty-one different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm British American Tobacco mean deviation of 1.38, and Risk Adjusted Performance of (0.06) to double-check the risk estimate we provide.
  
Refresh
British Amer 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 British daily returns, and it is calculated using variance and standard deviation. We also use British's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of British Amer volatility.

720 Days Market Risk

Very steady

Chance of Distress

Below Average

720 Days Economic Sensitivity

Follows the market closely
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as British Amer 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 British Amer at lower prices. For example, an investor can purchase British 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 British Amer'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 British Amer

0.96BTAFFBritish American TobPairCorr
0.93IMBBYIMPERIAL BRANDS PLCPairCorr
0.86IMBBFIMPERIAL BRANDS PLCPairCorr
0.76CCEPCoca Cola EuropacificPairCorr
0.72PMPhilip Morris InternPairCorr
0.69BUDAnheuser-Busch InbevPairCorr

Moving against British Amer

-0.64CUSICuisine SolutionsPairCorr
-0.53ACIAlbertsons Companies Financial Report 4th of August 2022 PairCorr

British Amer Market Sensitivity And Downside Risk

British Amer's beta coefficient measures the volatility of British stock compared to the systematic risk of the entire stock 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 British stock's returns against your selected market. In other words, British Amer's beta of 0.74 provides an investor with an approximation of how much risk British Amer stock can potentially add to one of your existing portfolios.
Let's try to break down what British's beta means in this case. As returns on the market increase, British Amer returns are expected to increase less than the market. However, during the bear market, the loss on holding British Amer will be expected to be smaller as well.
3 Months Beta |Analyze British American Tobacco Demand Trend
Check current 90 days British Amer correlation with market (DOW)

British Beta

    
  0.74  
British standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity 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

    
  1.86  
It is essential to understand the difference between upside risk (as represented by British Amer's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of British Amer stock's daily returns or price. Since the actual investment returns on holding a position in British Amer 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 British Amer.

British Amer Implied Volatility

    
  69.86  
British Amer's implied volatility exposes the market's sentiment of British American Tobacco stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if British Amer'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 British Amer stock will not fluctuate a lot when British Amer's options are near their expiration.

British American Tobacco Stock Volatility Analysis

Volatility refers to the frequency at which British Amer stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with British Amer's price changes. Investors will then calculate the volatility of British Amer'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 British Amer's volatility:

Historical Volatility

This type of stock volatility measures British Amer's fluctuations based on previous trends. It's commonly used to predict British Amer'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 British Amer's current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. British American Tobacco 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.
.

British Amer Projected Return Density Against Market

Considering the 90-day investment horizon British Amer has a beta of 0.7364 suggesting as returns on the market go up, British Amer average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding British American Tobacco 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 British Amer or Consumer Defensive 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 British Amer stock'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 British 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.
The company has an alpha of 0.0295, implying that it can generate a 0.0295 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
British Amer's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how British Amer stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Company's Stock Price Volatility?

Several factors can influence a company's stock 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.

British Amer Stock Risk Measures

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 British Amer or Consumer Defensive 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 British Amer stock'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 British 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.
Considering the 90-day investment horizon the coefficient of variation of British Amer is -3130.8. The daily returns are distributed with a variance of 3.45 and standard deviation of 1.86. The mean deviation of British American Tobacco is currently at 1.38. For similar time horizon, the selected benchmark (DOW) has volatility of 1.35
α
Alpha over DOW
0.0295
β
Beta against DOW0.74
σ
Overall volatility
1.86
Ir
Information ratio 0.0402

British Amer Stock Return Volatility

British Amer historical daily return volatility represents how much British Amer stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company has volatility of 1.8565% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.3408% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About British Amer Volatility

Volatility is a rate at which the price of British Amer 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 British Amer may increase or decrease. In other words, similar to British's beta indicator, it measures the risk of British Amer and helps estimate the fluctuations that may happen in a short period of time. So if prices of British Amer 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 ReportedProjected for 2022
Market Capitalization91.9 B96.8 B
British American Tobacco p.l.c. provides tobacco and nicotine products to consumers worldwide. British American Tobacco p.l.c. was incorporated in 1902 and is headquartered in London, the United Kingdom. British Amer operates under Tobacco classification in the United States and is traded on New York Stock Exchange. It employs 54365 people.

Nearest British long CALL Option Payoff at Expiration

British Amer's implied volatility is one of the determining factors in the pricing options written on British American Tobacco. Implied volatility approximates the future value of British Amerusing the option's current value. Options with high implied volatility have higher premiums and can be used to hedge the downside of investing in British American Tobacco over a specific time period.
View All British options
2022-06-17 CALL at $17.5 is a CALL option contract on British Amer's common stock with a strick price of 17.5 expiring on 2022-06-17. The contract was last traded on 2022-01-12 at 12:16:13 for $23.0 and, as of today, has 25 days remaining before the expiration. The option is currently trading at a bid price of $25.0, and an ask price of $26.2. The implied volatility as of the 23rd of May is 240.351.
 Profit 
Share
      British Amer Price At Expiration 

British Amer Investment Opportunity

British American Tobacco has a volatility of 1.86 and is 1.39 times more volatile than DOW. 16  of all equities and portfolios are less risky than British Amer. Compared to the overall equity markets, volatility of historical daily returns of British American Tobacco is lower than 16 () of all global equities and portfolios over the last 90 days. Use British American Tobacco to enhance returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of British Amer to be traded at $47.42 in 90 days. . Let's try to break down what British's beta means in this case. As returns on the market increase, British Amer returns are expected to increase less than the market. However, during the bear market, the loss on holding British Amer will be expected to be smaller as well.

Very weak diversification

The correlation between British American Tobacco and DJI is Very weak diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and DJI in the same portfolio, assuming nothing else is changed.

British Amer Additional Risk Indicators

The analysis of British Amer'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 British Amer's investment and either accepting that risk or mitigating it. Along with some common measures of British Amer stock 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(0.06)
Market Risk Adjusted Performance(0.12)
Mean Deviation1.38
Coefficient Of Variation(2,162)
Standard Deviation1.84
Variance3.39
Information Ratio0.0402
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

British Amer 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.
FUJIAN AONONG vs. British Amer
GM vs. British Amer
Ford vs. British Amer
Sentinelone Inc vs. British Amer
LINGYI ITECH vs. British Amer
Vmware vs. British Amer
Visa vs. British Amer
Walker Dunlop vs. British Amer
BANK OF NINGBO vs. British Amer
Salesforce vs. British Amer
Meta Platforms vs. British Amer
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 British Amer 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. British Amer'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, British Amer'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 British American Tobacco.
Continue to Trending Equities. Note that the British American Tobacco information on this page should be used as a complementary analysis to other British Amer's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Complementary Tools for British Stock analysis

When running British American Tobacco price analysis, check to measure British Amer'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 British Amer is operating at the current time. Most of British Amer's value examination focuses on studying past and present price action to predict the probability of British Amer's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move British Amer's price. Additionally, you may evaluate how the addition of British Amer to your portfolios can decrease your overall portfolio volatility.
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Is British Amer's industry 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 British Amer. If investors know British 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 British Amer 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 British American Tobacco is measured differently than its book value, which is the value of British that is recorded on the company's balance sheet. Investors also form their own opinion of British Amer's value that differs from its market value or its book value, called intrinsic value, which is British Amer'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 British Amer's market value can be influenced by many factors that don't directly affect British Amer'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 British Amer's value and its price as these two are different measures arrived at by different means. Investors typically determine British Amer value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, British Amer'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.