We consider Darden Restaurants very steady. Darden Restaurants secures Sharpe Ratio (or Efficiency) of 0.12, which denotes the company had 0.12% return per unit of risk over the last 3 months. Our standpoint towards predicting the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-nine technical indicators for Darden Restaurants, which you can use to evaluate the future volatility of the firm. Please confirm Darden Restaurants' Mean Deviation of 0.7559, coefficient of variation of 807.48, and Downside Deviation of 0.987 to check if the risk estimate we provide is consistent with the expected return of 0.13%. Key indicators related to Darden Restaurants' volatility include:
30 Days Market Risk
Chance Of Distress
30 Days Economic Sensitivity
Darden Restaurants 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 Darden daily returns, and it is calculated using variance and standard deviation. We also use Darden's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Darden Restaurants volatility.
ESG SustainabilityWhile most ESG disclosures are voluntary, Darden Restaurants' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Darden Restaurants' managers and investors.
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Darden Restaurants 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 Darden Restaurants at lower prices. For example, an investor can purchase Darden 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 Darden Restaurants' 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 Darden Stock
Moving against Darden Stock
Darden Restaurants Market Sensitivity And Downside Risk
Darden Restaurants' beta coefficient measures the volatility of Darden 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 Darden stock's returns against your selected market. In other words, Darden Restaurants's beta of 0.68 provides an investor with an approximation of how much risk Darden Restaurants stock can potentially add to one of your existing portfolios.Darden Restaurants has low volatility with Treynor Ratio of 0.17, Maximum Drawdown of 4.89 and kurtosis of 0.65. However, we advice all investors to further analyze Darden Restaurants to make certain all market information is desiminated and is consistent with the current expectations about Darden Restaurants upside potential. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Darden Restaurants' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Darden Restaurants' 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. 3 Months Beta |Analyze Darden Restaurants Demand TrendCheck current 90 days Darden Restaurants correlation with market (NYSE Composite)
Darden 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.
It is essential to understand the difference between upside risk (as represented by Darden Restaurants's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Darden Restaurants' daily returns or price. Since the actual investment returns on holding a position in darden 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 Darden Restaurants.
Using Darden Put Option to Manage Risk
Put options written on Darden Restaurants grant holders of the option the right to sell a specified amount of Darden Restaurants at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Darden Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Darden Restaurants' position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Darden Restaurants will be realized, the loss incurred will be offset by the profits made with the option trade.
Darden Restaurants' PUT expiring on 2024-03-15
Darden Restaurants Stock Volatility Analysis
Volatility refers to the frequency at which Darden Restaurants stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Darden Restaurants' price changes. Investors will then calculate the volatility of Darden Restaurants' 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 Darden Restaurants' volatility:
Historical VolatilityThis type of stock volatility measures Darden Restaurants' fluctuations based on previous trends. It's commonly used to predict Darden Restaurants' future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.
Implied VolatilityThis type of volatility provides a positive outlook on future price fluctuations for Darden Restaurants' 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 Darden Restaurants' to be redeemed at a future date.
Darden Restaurants Projected Return Density Against MarketConsidering the 90-day investment horizon Darden Restaurants has a beta of 0.675 suggesting as returns on the market go up, Darden Restaurants average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Darden Restaurants 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 Darden Restaurants or Hotels, Restaurants & Leisure 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 Darden Restaurants' 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 Darden 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 0.0063, implying that it can generate a 0.0063 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Darden Restaurants' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how darden 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 Darden Restaurants Price Volatility?Several factors can influence a stock's market volatility:
IndustrySpecific 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 environmentWhen 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 PerformanceSometimes 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.
Darden Restaurants 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 Darden Restaurants or Hotels, Restaurants & Leisure 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 Darden Restaurants' 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 Darden 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 Darden Restaurants is 822.04. The daily returns are distributed with a variance of 1.07 and standard deviation of 1.03. The mean deviation of Darden Restaurants is currently at 0.77. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.63
Darden Restaurants Stock Return VolatilityDarden Restaurants historical daily return volatility represents how much of Darden Restaurants stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 1.0323% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.6563% volatility on return distribution over the 90 days horizon.
About Darden Restaurants Volatility
Volatility is a rate at which the price of Darden Restaurants 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 Darden Restaurants may increase or decrease. In other words, similar to Darden's beta indicator, it measures the risk of Darden Restaurants and helps estimate the fluctuations that may happen in a short period of time. So if prices of Darden Restaurants 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.
|Projected for 2024
Darden Restaurants' 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 Darden Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Darden Restaurants' price varies over time.
3 ways to utilize Darden Restaurants' volatility to invest betterHigher Darden Restaurants' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Darden Restaurants 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. Darden Restaurants 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 Darden Restaurants investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Darden Restaurants' 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 Darden Restaurants' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Darden Restaurants Investment OpportunityDarden Restaurants has a volatility of 1.03 and is 1.56 times more volatile than NYSE Composite. 9 of all equities and portfolios are less risky than Darden Restaurants. Compared to the overall equity markets, volatility of historical daily returns of Darden Restaurants is lower than 9 () of all global equities and portfolios over the last 90 days. Use Darden Restaurants to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a large bullish trend. Check odds of Darden Restaurants to be traded at $185.32 in 90 days.
Darden Restaurants Additional Risk Indicators
The analysis of Darden Restaurants' 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 Darden Restaurants' investment and either accepting that risk or mitigating it. Along with some common measures of Darden Restaurants 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.
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.
Darden Restaurants 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 Darden Restaurants 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. Darden Restaurants' 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, Darden Restaurants' 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 Darden Restaurants.When determining whether Darden Restaurants offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Darden Restaurants' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Darden Restaurants Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Darden Restaurants Stock:
Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Darden Restaurants. Also, note that the market value of any Company could be tightly coupled with the direction of predictive economic indicators such as signals in metropolitan statistical area.For more detail on how to invest in Darden Stock please use our How to Invest in Darden Restaurants guide.You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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When running Darden Restaurants' price analysis, check to measure Darden Restaurants' 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 Darden Restaurants is operating at the current time. Most of Darden Restaurants' value examination focuses on studying past and present price action to predict the probability of Darden Restaurants' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Darden Restaurants' price. Additionally, you may evaluate how the addition of Darden Restaurants to your portfolios can decrease your overall portfolio volatility.
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Is Darden Restaurants' 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 Darden Restaurants. If investors know Darden 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 Darden Restaurants 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
Revenue Per Share
Quarterly Revenue Growth
The market value of Darden Restaurants is measured differently than its book value, which is the value of Darden that is recorded on the company's balance sheet. Investors also form their own opinion of Darden Restaurants' value that differs from its market value or its book value, called intrinsic value, which is Darden Restaurants' 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 Darden Restaurants' market value can be influenced by many factors that don't directly affect Darden Restaurants' 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 Darden Restaurants' value and its price as these two are different measures arrived at by different means. Investors typically determine if Darden Restaurants is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Darden Restaurants' 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.