Flight Centre (Australia) Volatility

FLT -  Australia Stock  

AUD 18.33  0.13  0.71%

Flight Centre appears to be somewhat reliable, given 3 months investment horizon. Flight Centre Travel secures Sharpe Ratio (or Efficiency) of 0.12, which denotes the company had 0.12% of 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-one technical indicators for Flight Centre Travel, which you can use to evaluate the future volatility of the firm. Please utilize Flight Centre's Downside Deviation of 2.61, mean deviation of 2.08, and Coefficient Of Variation of 862.28 to check if our risk estimates are consistent with your expectations.

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

720 Days Market Risk

Somewhat reliable

Chance of Distress

Below Average

720 Days Economic Sensitivity

Moves indifferently to market moves

Flight Centre Market Sensitivity And Downside Risk

Flight Centre's beta coefficient measures the volatility of Flight 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 Flight stock's returns against your selected market. In other words, Flight Centre's beta of -0.0938 provides an investor with an approximation of how much risk Flight Centre stock can potentially add to one of your existing portfolios.
Let's try to break down what Flight's beta means in this case. As returns on the market increase, returns on owning Flight Centre are expected to decrease at a much lower rate. During the bear market, Flight Centre is likely to outperform the market.
3 Months Beta |Analyze Flight Centre Travel Demand Trend
Check current 90 days Flight Centre correlation with market (DOW)

Flight Beta

    
  -0.0938  
Flight 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

    
  3.12  
It is essential to understand the difference between upside risk (as represented by Flight Centre's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Flight Centre stock's daily returns or price. Since the actual investment returns on holding a position in Flight Centre 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 Flight Centre.

Flight Centre Travel Stock Volatility Analysis

Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Developed by Larry Williams, the Weighted Close is the average of Flight Centre Travel high, low and close of a chart with the close values weighted twice. It can be used to smooth an indicator that normally takes only Flight Centre closing price as input. View also all equity analysis or get more info about weighted close price price transform indicator.

Flight Centre Projected Return Density Against Market

Assuming the 90 days trading horizon Flight Centre Travel has a beta of -0.0938 . This usually indicates as returns on benchmark increase, returns on holding Flight Centre are expected to decrease at a much lower rate. During the bear market, however, Flight Centre Travel is likely to outperform the market.
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 Flight Centre or Consumer Cyclical 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 Flight Centre 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 Flight 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 0.3273, implying that it can generate a 0.33 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 

Flight Centre 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 Flight Centre or Consumer Cyclical 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 Flight Centre 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 Flight 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.
Assuming the 90 days trading horizon the coefficient of variation of Flight Centre is 831.73. The daily returns are distributed with a variance of 9.74 and standard deviation of 3.12. The mean deviation of Flight Centre Travel is currently at 2.24. For similar time horizon, the selected benchmark (DOW) has volatility of 0.69
α
Alpha over DOW
0.33
β
Beta against DOW-0.09
σ
Overall volatility
3.12
Ir
Information ratio 0.11

Flight Centre Stock Return Volatility

Flight Centre historical daily return volatility represents how much Flight Centre stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company assumes 3.1206% volatility of returns over the 90 days investment horizon. By contrast, DOW inherits 0.6301% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Flight Centre Volatility

Volatility is a rate at which the price of Flight Centre 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 Flight Centre may increase or decrease. In other words, similar to Flight's beta indicator, it measures the risk of Flight Centre and helps estimate the fluctuations that may happen in a short period of time. So if prices of Flight Centre 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.
Flight Centre Travel Group Limited provides travel retailing services for the leisure, corporate, and wholesale travel sectors in Australia, New Zealand, Europe, the Middle East, Africa, the Americas, Asia, and Internationally. Flight Centre Travel Group Limited was incorporated in 1987 and is headquartered in South Brisbane, Australia. Flight Centre operates under Travel Services classification in Australia and is traded on Australian Securities Exchange. It employs 10615 people.

Flight Centre Investment Opportunity

Flight Centre Travel has a volatility of 3.12 and is 4.95 times more volatile than DOW. 26  of all equities and portfolios are less risky than Flight Centre. Compared to the overall equity markets, volatility of historical daily returns of Flight Centre Travel is lower than 26 () of all global equities and portfolios over the last 90 days. Use Flight Centre Travel to enhance returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of Flight Centre to be traded at A$20.16 in 90 days. . Let's try to break down what Flight's beta means in this case. As returns on the market increase, returns on owning Flight Centre are expected to decrease at a much lower rate. During the bear market, Flight Centre is likely to outperform the market.

Good diversification

The correlation between Flight Centre Travel and DJI is Good diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Flight Centre Travel and DJI in the same portfolio assuming nothing else is changed.

Flight Centre Additional Risk Indicators

The analysis of Flight Centre'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 Flight Centre's investment and either accepting that risk or mitigating it. Along with some common measures of Flight Centre 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 Performance0.0877
Market Risk Adjusted Performance(3.46)
Mean Deviation2.08
Semi Deviation2.25
Downside Deviation2.61
Coefficient Of Variation862.28
Standard Deviation2.89
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.

Flight Centre 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.
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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 Flight Centre 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. Flight Centre'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, Flight Centre'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 Flight Centre Travel.
Please check Investing Opportunities. Note that the Flight Centre Travel information on this page should be used as a complementary analysis to other Flight Centre'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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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When running Flight Centre Travel price analysis, check to measure Flight Centre'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 Flight Centre is operating at the current time. Most of Flight Centre's value examination focuses on studying past and present price action to predict the probability of Flight Centre's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Flight Centre's price. Additionally, you may evaluate how the addition of Flight Centre to your portfolios can decrease your overall portfolio volatility.
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Please note, there is a significant difference between Flight Centre's value and its price as these two are different measures arrived at by different means. Investors typically determine Flight Centre value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Flight Centre'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.