Kosmos Stock Volatility

KOS
 Stock
  

USD 6.61  0.21  3.28%   

We consider Kosmos Energy moderately volatile. Kosmos Energy has Sharpe Ratio of 0.0203, which conveys that the firm had 0.0203% of return per unit of risk over the last 3 months. Our standpoint towards estimating 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-seven technical indicators for Kosmos Energy, which you can use to evaluate the future volatility of the firm. Please verify Kosmos Energy mean deviation of 3.58, and Risk Adjusted Performance of (0.018645) to check out if the risk estimate we provide is consistent with the expected return of 0.0895%.
  
Kosmos Energy 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 Kosmos daily returns, and it is calculated using variance and standard deviation. We also use Kosmos's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Kosmos Energy volatility.

180 Days Market Risk

Moderately volatile

Chance of Distress

Close to Average

180 Days Economic Sensitivity

Actively responds to the market
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Kosmos Energy 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 Kosmos Energy at lower prices. For example, an investor can purchase Kosmos 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 Kosmos Energy'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 Kosmos Energy

+0.62EOGEog ResourcesPairCorr
+0.77CNQCanadian Natural ResPairCorr
+0.84OXYOccidental Petroleum Corp Potential GrowthPairCorr
+0.71PXDPioneer Natural ResourcesPairCorr
+0.69WDSWoodside Energy GroupPairCorr
+0.68DVNDevon Energy Corp Potential GrowthPairCorr

Kosmos Energy Market Sensitivity And Downside Risk

Kosmos Energy's beta coefficient measures the volatility of Kosmos 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 Kosmos stock's returns against your selected market. In other words, Kosmos Energy's beta of 1.63 provides an investor with an approximation of how much risk Kosmos Energy stock can potentially add to one of your existing portfolios.
Kosmos Energy exhibits very low volatility with skewness of -0.27 and kurtosis of 0.33. However, we advise investors to further study Kosmos Energy 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 Kosmos Energy's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Kosmos 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.
3 Months Beta |Analyze Kosmos Energy Demand Trend
Check current 90 days Kosmos Energy correlation with market (DOW)

Kosmos Beta

    
  1.63  
Kosmos 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

    
  4.41  
It is essential to understand the difference between upside risk (as represented by Kosmos Energy's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Kosmos Energy's daily returns or price. Since the actual investment returns on holding a position in kosmos 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 Kosmos Energy.

Using Kosmos Put Option to Manage Risk

Put options written on Kosmos Energy grant holders of the option the right to sell a specified amount of Kosmos Energy 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 Kosmos Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Kosmos Energy's 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 Kosmos Energy will be realized, the loss incurred will be offset by the profits made with the option trade.

Kosmos Energy's PUT expiring on 2022-12-16

   Profit   
Share
       Kosmos Energy Price At Expiration  

Current Kosmos Energy Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-12-16 PUT at $10.0-0.92140.0807132022-12-163.5 - 3.83.1View
Put
2022-12-16 PUT at $9.0-0.93990.091512022-12-162.55 - 2.72.6View
Put
2022-12-16 PUT at $7.5-0.81410.25964052022-12-161.1 - 1.251.19View
Put
2022-12-16 PUT at $6.0-0.31910.325612222022-12-160.15 - 0.30.25View
Put
2022-12-16 PUT at $5.0-0.08240.123717552022-12-160.0 - 0.050.05View
View All Kosmos Energy Options

Kosmos Energy Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Kosmos Energy's fluctuations based on previous trends. It's commonly used to predict Kosmos Energy'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 Kosmos Energy's 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 Kosmos Energy's 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. The Median Price line plots median indexes of Kosmos Energy price series.
.

Kosmos Energy Projected Return Density Against Market

Considering the 90-day investment horizon the stock has the beta coefficient of 1.6261 . This indicates as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Kosmos Energy will likely underperform.
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 Kosmos Energy or Energy 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 Kosmos Energy'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 Kosmos 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. Kosmos Energy is significantly underperforming DOW.
   Predicted Return Density   
       Returns  
Kosmos Energy's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how kosmos 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 Kosmos Energy Price Volatility?

Several factors can influence a Stock'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.

Kosmos Energy 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 Kosmos Energy or Energy 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 Kosmos Energy'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 Kosmos 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 Kosmos Energy is 4925.43. The daily returns are distributed with a variance of 19.44 and standard deviation of 4.41. The mean deviation of Kosmos Energy is currently at 3.51. For similar time horizon, the selected benchmark (DOW) has volatility of 1.37
α
Alpha over DOW
-0.21
β
Beta against DOW1.63
σ
Overall volatility
4.41
Ir
Information ratio -0.04

Kosmos Energy Stock Return Volatility

Kosmos Energy historical daily return volatility represents how much of Kosmos Energy stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The enterprise has volatility of 4.4087% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.3877% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About Kosmos Energy Volatility

Volatility is a rate at which the price of Kosmos Energy 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 Kosmos Energy may increase or decrease. In other words, similar to Kosmos's beta indicator, it measures the risk of Kosmos Energy and helps estimate the fluctuations that may happen in a short period of time. So if prices of Kosmos Energy 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 Capitalization1.6 BB

Kosmos Energy Investment Opportunity

Kosmos Energy has a volatility of 4.41 and is 3.17 times more volatile than DOW. 38  of all equities and portfolios are less risky than Kosmos Energy. Compared to the overall equity markets, volatility of historical daily returns of Kosmos Energy is lower than 38 () of all global equities and portfolios over the last 90 days. Use Kosmos Energy to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Kosmos Energy to be traded at $7.93 in 90 days.

Very weak diversification

The correlation between Kosmos Energy and DJI is 0.5 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Kosmos Energy and DJI in the same portfolio, assuming nothing else is changed.

Kosmos Energy Additional Risk Indicators

The analysis of Kosmos Energy'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 Kosmos Energy's investment and either accepting that risk or mitigating it. Along with some common measures of Kosmos Energy 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.

Kosmos Energy 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 Kosmos Energy 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. Kosmos Energy'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, Kosmos Energy'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 Kosmos Energy.
Please see Correlation Analysis. You can also try Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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When running Kosmos Energy price analysis, check to measure Kosmos Energy'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 Kosmos Energy is operating at the current time. Most of Kosmos Energy's value examination focuses on studying past and present price action to predict the probability of Kosmos Energy's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Kosmos Energy's price. Additionally, you may evaluate how the addition of Kosmos Energy to your portfolios can decrease your overall portfolio volatility.
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Is Kosmos Energy'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 Kosmos Energy. If investors know Kosmos 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 Kosmos Energy 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 YOY
9.74
Market Capitalization
2.9 B
Quarterly Revenue Growth YOY
1.29
Return On Assets
0.11
Return On Equity
0.74
The market value of Kosmos Energy is measured differently than its book value, which is the value of Kosmos that is recorded on the company's balance sheet. Investors also form their own opinion of Kosmos Energy's value that differs from its market value or its book value, called intrinsic value, which is Kosmos Energy'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 Kosmos Energy's market value can be influenced by many factors that don't directly affect Kosmos Energy'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 Kosmos Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine Kosmos Energy value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Kosmos Energy'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.