Rio Tinto Adr Stock Volatility

RIO Stock  USD 63.74  0.28  0.44%   
Rio Tinto ADR maintains Sharpe Ratio (i.e., Efficiency) of -0.12, which implies the firm had a -0.12% return per unit of risk over the last 3 months. Rio Tinto ADR exposes twenty-two different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please check Rio Tinto's Risk Adjusted Performance of (0.06), variance of 1.82, and Coefficient Of Variation of (887.89) to confirm the risk estimate we provide. Key indicators related to Rio Tinto's volatility include:
720 Days Market Risk
Chance Of Distress
720 Days Economic Sensitivity
Rio Tinto 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 Rio daily returns, and it is calculated using variance and standard deviation. We also use Rio's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Rio Tinto volatility.
  
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Rio Tinto 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 Rio Tinto at lower prices. For example, an investor can purchase Rio 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 Rio Tinto'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 Rio Stock

  0.89MP MP Materials Corp Financial Report 2nd of May 2024 PairCorr
  0.8NB NioCorp DevelopmentsPairCorr
  0.91VALE Vale SA ADR Financial Report 24th of April 2024 PairCorr
  0.69USGOW US GoldMining WarrantPairCorr

Moving against Rio Stock

  0.88IPX IperionX Limited AmericanPairCorr
  0.6ELBM Electra Battery Materials Earnings Call TodayPairCorr
  0.53AVLNF Avalon Advanced MaterialsPairCorr
  0.41MTRN Materion Downward RallyPairCorr

Rio Tinto Market Sensitivity And Downside Risk

Rio Tinto's beta coefficient measures the volatility of Rio stock compared to the systematic risk of the entire 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 Rio stock's returns against your selected market. In other words, Rio Tinto's beta of 1.58 provides an investor with an approximation of how much risk Rio Tinto stock can potentially add to one of your existing portfolios. Rio Tinto ADR exhibits very low volatility with skewness of -0.53 and kurtosis of 0.58. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Rio Tinto'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 Rio Tinto'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 financial instruments as prices fall.
3 Months Beta |Analyze Rio Tinto ADR Demand Trend
Check current 90 days Rio Tinto correlation with market (NYSE Composite)

Rio Beta

    
  1.58  
Rio standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity 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 Rio Tinto's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Rio Tinto's daily returns or price. Since the actual investment returns on holding a position in rio 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 Rio Tinto.

Using Rio Put Option to Manage Risk

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

Rio Tinto's PUT expiring on 2024-04-19

   Profit   
       Rio Tinto Price At Expiration  

Current Rio Tinto Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2024-04-19 PUT at $72.5-0.85920.029112024-04-198.6 - 10.58.7View
Put
2024-04-19 PUT at $70.0-0.71570.03495902024-04-194.5 - 8.17.91View
Put
2024-04-19 PUT at $65.0-0.71980.12845192024-04-192.0 - 2.12.03View
Put
2024-04-19 PUT at $62.5-0.37790.116525202024-04-190.85 - 0.90.88View
Put
2024-04-19 PUT at $60.0-0.15850.066638322024-04-190.3 - 0.350.31View
Put
2024-04-19 PUT at $57.5-0.06740.030520692024-04-190.1 - 0.20.13View
Put
2024-04-19 PUT at $55.0-0.04350.01693632024-04-190.0 - 0.10.1View
Put
2024-04-19 PUT at $47.5-0.01530.00441382024-04-190.0 - 0.10.05View
View All Rio Tinto Options

Rio Tinto ADR Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Rio Tinto's fluctuations based on previous trends. It's commonly used to predict Rio Tinto'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 Rio Tinto'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 Rio Tinto'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. Rio Tinto ADR 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.

Rio Tinto Projected Return Density Against Market

Considering the 90-day investment horizon the stock has the beta coefficient of 1.5815 indicating as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Rio Tinto 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 Rio Tinto or Metals & Mining 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 Rio Tinto'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 Rio 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.
Rio Tinto ADR has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming NYSE Composite.
   Predicted Return Density   
       Returns  
Rio Tinto's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how rio 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 Rio Tinto 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.

Rio Tinto Stock Risk Measures

Considering the 90-day investment horizon the coefficient of variation of Rio Tinto is -801.52. The daily returns are distributed with a variance of 1.95 and standard deviation of 1.4. The mean deviation of Rio Tinto ADR is currently at 1.15. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.56
α
Alpha over NYSE Composite
-0.36
β
Beta against NYSE Composite1.58
σ
Overall volatility
1.40
Ir
Information ratio -0.21

Rio Tinto Stock Return Volatility

Rio Tinto historical daily return volatility represents how much of Rio Tinto stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 1.3959% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.573% volatility on return distribution over the 90 days horizon.
 Performance 
       Timeline  

About Rio Tinto Volatility

Volatility is a rate at which the price of Rio Tinto 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 Rio Tinto may increase or decrease. In other words, similar to Rio's beta indicator, it measures the risk of Rio Tinto and helps estimate the fluctuations that may happen in a short period of time. So if prices of Rio Tinto 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 2024
Selling And Marketing Expenses2.8 B2.1 B
Rio Tinto's 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 Rio Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Rio Tinto's price varies over time.

3 ways to utilize Rio Tinto's volatility to invest better

Higher Rio Tinto's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Rio Tinto ADR 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. Rio Tinto ADR 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 Rio Tinto ADR investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in Rio Tinto's 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 Rio Tinto's 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.

Rio Tinto Investment Opportunity

Rio Tinto ADR has a volatility of 1.4 and is 2.46 times more volatile than NYSE Composite. 12 percent of all equities and portfolios are less risky than Rio Tinto. You can use Rio Tinto ADR to enhance the returns of your portfolios. The stock experiences a normal upward fluctuation. Check odds of Rio Tinto to be traded at $66.93 in 90 days.

Poor diversification

The correlation between Rio Tinto ADR and NYA is 0.65 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto ADR and NYA in the same portfolio, assuming nothing else is changed.

Rio Tinto Additional Risk Indicators

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

Rio Tinto 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 Rio Tinto 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. Rio Tinto'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, Rio Tinto'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 Rio Tinto ADR.
When determining whether Rio Tinto ADR offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Rio Tinto's 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 Rio Tinto Adr Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Rio Tinto Adr Stock:
Check out Your Equity Center to better understand how to build diversified portfolios, which includes a position in Rio Tinto ADR. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in gross domestic product.
You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Complementary Tools for Rio Stock analysis

When running Rio Tinto's price analysis, check to measure Rio Tinto'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 Rio Tinto is operating at the current time. Most of Rio Tinto's value examination focuses on studying past and present price action to predict the probability of Rio Tinto's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Rio Tinto's price. Additionally, you may evaluate how the addition of Rio Tinto to your portfolios can decrease your overall portfolio volatility.
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Is Rio Tinto'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 Rio Tinto. If investors know Rio 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 Rio Tinto 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
0.431
Dividend Share
4.349
Earnings Share
6.16
Revenue Per Share
33.33
Quarterly Revenue Growth
0.062
The market value of Rio Tinto ADR is measured differently than its book value, which is the value of Rio that is recorded on the company's balance sheet. Investors also form their own opinion of Rio Tinto's value that differs from its market value or its book value, called intrinsic value, which is Rio Tinto'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 Rio Tinto's market value can be influenced by many factors that don't directly affect Rio Tinto'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 Rio Tinto's value and its price as these two are different measures arrived at by different means. Investors typically determine if Rio Tinto is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Rio Tinto'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.