EDP Renovaveis (Portugal) Volatility

EDPR Stock

EUR 18.58 0.09 0.48%

EDP Renovaveis secures Sharpe Ratio (or Efficiency) of -0.0992, which denotes the company had -0.0992% of return per unit of risk over the last 3 months. Our standpoint towards predicting 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. EDP Renovaveis exposes twenty-one different technical indicators, which can help you to evaluate volatility embedded in its stock price that cannot be diversified away. Please confirm EDP Renovaveis mean deviation of 1.09 to check the risk estimate we provide.

EDP Renovaveis 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 EDP daily returns, and it is calculated using variance and standard deviation. We also use EDP's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of EDP Renovaveis volatility.

180 Days Market Risk

Very steady

Focus

Chance of Distress

Very Small

Focus

180 Days Economic Sensitivity

Barely shadows the market

Focus

Since volatility provides investors with entry points to take advantage of stock prices, companies, such as EDP Renovaveis 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 EDP Renovaveis at lower prices. For example, an investor can purchase EDP 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 EDP Renovaveis' 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.

EDP Renovaveis Market Sensitivity And Downside Risk

EDP Renovaveis' beta coefficient measures the volatility of EDP 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 EDP stock's returns against your selected market. In other words, EDP Renovaveis's beta of 0.17 provides an investor with an approximation of how much risk EDP Renovaveis stock can potentially add to one of your existing portfolios.

EDP Renovaveis exhibits very low volatility with skewness of 0.17 and kurtosis of 0.3. However, we advise investors to further study EDP Renovaveis technical indicators to ensure that 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 EDP Renovaveis' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact EDP Renovaveis' 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 EDP Renovaveis Demand Trend

Check current 90 days EDP Renovaveis correlation with market (NYSE Composite)

EDP Beta

0.17

EDP 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

1.4

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

EDP Renovaveis Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures EDP Renovaveis' fluctuations based on previous trends. It's commonly used to predict EDP Renovaveis' 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 EDP Renovaveis' 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 EDP Renovaveis' 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. EDP Renovaveis 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.

EDP Renovaveis Projected Return Density Against Market

Assuming the 90 days trading horizon EDP Renovaveis has a beta of 0.1675 suggesting as returns on the market go up, EDP Renovaveis average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding EDP Renovaveis 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 EDP Renovaveis or Independent Power and Renewable Electricity Producers 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 EDP Renovaveis' 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 EDP 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 a negative alpha, implying that the risk taken by holding this instrument is not justified. EDP Renovaveis is significantly underperforming NYSE Composite.

Predicted Return Density

Returns

EDP Renovaveis' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how edp 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 an EDP Renovaveis 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.

EDP Renovaveis Stock Risk Measures

α	Alpha over NYSE Composite	-0.14	Details
β	Beta against NYSE Composite	0.17	Details
σ	Overall volatility	1.40	Details
Ir	Information ratio	-0.06	Details

EDP Renovaveis Stock Return Volatility

EDP Renovaveis historical daily return volatility represents how much of EDP Renovaveis stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 1.3976% volatility on return distribution over the 90 days horizon. By contrast, NYSE Composite accepts 0.9132% volatility on return distribution over the 90 days horizon.

Performance (%)

Timeline

About EDP Renovaveis Volatility

Volatility is a rate at which the price of EDP Renovaveis 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 EDP Renovaveis may increase or decrease. In other words, similar to EDP's beta indicator, it measures the risk of EDP Renovaveis and helps estimate the fluctuations that may happen in a short period of time. So if prices of EDP Renovaveis 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 EDP Renovaveis' volatility to invest better

Higher EDP Renovaveis' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of EDP Renovaveis 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. EDP Renovaveis 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 EDP Renovaveis investment. A higher volatility means higher risk and potentially larger changes in value.
Identifying Opportunities: High volatility in EDP Renovaveis' 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 EDP Renovaveis' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.

Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.

EDP Renovaveis Investment Opportunity

EDP Renovaveis has a volatility of 1.4 and is 1.54 times more volatile than NYSE Composite. 12 of all equities and portfolios are less risky than EDP Renovaveis. Compared to the overall equity markets, volatility of historical daily returns of EDP Renovaveis is lower than 12 () of all global equities and portfolios over the last 90 days. Use EDP Renovaveis to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a normal downward trend and little activity. Check odds of EDP Renovaveis to be traded at €18.39 in 90 days.

Average diversification

The correlation between EDP Renovaveis and NYA is 0.11 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding EDP Renovaveis and NYA in the same portfolio, assuming nothing else is changed.

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EDP Renovaveis Additional Risk Indicators

The analysis of EDP Renovaveis' 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 EDP Renovaveis' investment and either accepting that risk or mitigating it. Along with some common measures of EDP Renovaveis 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	(0.09)
	Market Risk Adjusted Performance	(0.88)
	Mean Deviation	1.09
	Coefficient Of Variation	(1,008)
	Standard Deviation	1.4
	Variance	1.95
	Information Ratio	(0.06)

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.

EDP Renovaveis 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 EDP Renovaveis 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. EDP Renovaveis' 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, EDP Renovaveis' 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 EDP Renovaveis.

Check out Investing Opportunities to better understand how to build diversified portfolios. You can also try Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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When running EDP Renovaveis' price analysis, check to measure EDP Renovaveis' 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 EDP Renovaveis is operating at the current time. Most of EDP Renovaveis' value examination focuses on studying past and present price action to predict the probability of EDP Renovaveis' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move EDP Renovaveis' price. Additionally, you may evaluate how the addition of EDP Renovaveis to your portfolios can decrease your overall portfolio volatility.

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Please note, there is a significant difference between EDP Renovaveis' value and its price as these two are different measures arrived at by different means. Investors typically determine if EDP Renovaveis is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, EDP Renovaveis' 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. Check out Investing Opportunities to better understand how to build diversified portfolios.

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EDP Renovaveis (Portugal) Volatility

180 Days Market Risk

Chance of Distress

180 Days Economic Sensitivity

EDP Renovaveis Market Sensitivity And Downside Risk

EDP Beta

Standard Deviation

EDP Renovaveis Stock Volatility Analysis

Historical Volatility

Implied Volatility

EDP Renovaveis Projected Return Density Against Market

What Drives an EDP Renovaveis Price Volatility?

Industry

Political and Economic environment

The Company's Performance

EDP Renovaveis Stock Risk Measures

EDP Renovaveis Stock Return Volatility

About EDP Renovaveis Volatility

3 ways to utilize EDP Renovaveis' volatility to invest better

EDP Renovaveis Investment Opportunity

Average diversification

EDP Renovaveis Additional Risk Indicators

EDP Renovaveis Suggested Diversification Pairs

Complementary Tools for EDP Stock analysis

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