Centrica PLC (UK) Volatility
| CNA Stock | 126.25 0.25 0.20% |
Centrica PLC is out of control given 3 months investment horizon. Centrica PLC secures Sharpe Ratio (or Efficiency) of 0.11, which signifies that the company had a 0.11% return per unit of risk over the last 3 months. We were able to analyze and collect data for twenty-nine different technical indicators, which can help you to evaluate if expected returns of 14.0% are justified by taking the suggested risk. Use Centrica PLC Risk Adjusted Performance of 0.1069, downside deviation of 17.54, and Mean Deviation of 292.67 to evaluate company specific risk that cannot be diversified away. Key indicators related to Centrica PLC's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Centrica PLC 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 Centrica daily returns, and it is calculated using variance and standard deviation. We also use Centrica's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Centrica PLC volatility.
Centrica |
ESG Sustainability
While most ESG disclosures are voluntary, Centrica PLC's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Centrica PLC's managers and investors.Environment Score | Governance Score | Social Score |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Centrica PLC can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game as hey may decide to buy additional stocks of Centrica PLC at lower prices to lower their average cost per share. Similarly, when the prices of Centrica PLC's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Moving against Centrica Stock
Centrica PLC Market Sensitivity And Downside Risk
Centrica PLC's beta coefficient measures the volatility of Centrica 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 Centrica stock's returns against your selected market. In other words, Centrica PLC's beta of -15.76 provides an investor with an approximation of how much risk Centrica PLC stock can potentially add to one of your existing portfolios. Centrica PLC is showing large volatility of returns over the selected time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Centrica PLC'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 Centrica PLC'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 Centrica PLC Demand TrendCheck current 90 days Centrica PLC correlation with market (Dow Jones Industrial)Centrica Beta |
Centrica 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 | 124.82 |
It is essential to understand the difference between upside risk (as represented by Centrica PLC's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Centrica PLC's daily returns or price. Since the actual investment returns on holding a position in centrica 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 Centrica PLC.
Centrica PLC Stock Volatility Analysis
Volatility refers to the frequency at which Centrica PLC stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Centrica PLC's price changes. Investors will then calculate the volatility of Centrica PLC'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 Centrica PLC's volatility:
Historical Volatility
This type of stock volatility measures Centrica PLC's fluctuations based on previous trends. It's commonly used to predict Centrica PLC'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 Centrica PLC'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 Centrica PLC'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. Centrica PLC 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.
Centrica PLC Projected Return Density Against Market
Assuming the 90 days trading horizon Centrica PLC has a beta of -15.7591 suggesting as returns on its benchmark rise, returns on holding Centrica PLC are expected to decrease by similarly larger amounts. On the other hand, during market turmoils, Centrica PLC is expected to outperform its benchmark.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 Centrica PLC or Multi-Utilities 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 Centrica PLC'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 Centrica 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.
Centrica PLC has an alpha of 147.4879, implying that it can generate a 147.49 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Centrica PLC 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.Centrica PLC Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Centrica PLC is 891.54. The daily returns are distributed with a variance of 15580.77 and standard deviation of 124.82. The mean deviation of Centrica PLC is currently at 30.34. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.79
α | Alpha over Dow Jones | 147.49 | |
β | Beta against Dow Jones | -15.76 | |
σ | Overall volatility | 124.82 | |
Ir | Information ratio | 0.12 |
Centrica PLC Stock Return Volatility
Centrica PLC historical daily return volatility represents how much of Centrica PLC stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 124.823% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7914% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Centrica PLC Volatility
Volatility is a rate at which the price of Centrica PLC 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 Centrica PLC may increase or decrease. In other words, similar to Centrica's beta indicator, it measures the risk of Centrica PLC and helps estimate the fluctuations that may happen in a short period of time. So if prices of Centrica PLC 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 Reported | Projected for Next Year | ||
| Selling And Marketing Expenses | 2.2 B | 2 B |
Centrica PLC'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 Centrica Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Centrica PLC's price varies over time.
3 ways to utilize Centrica PLC's volatility to invest better
Higher Centrica PLC's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Centrica PLC 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. Centrica PLC 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 Centrica PLC investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Centrica PLC'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 Centrica PLC's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Centrica PLC Investment Opportunity
Centrica PLC has a volatility of 124.82 and is 158.0 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Centrica PLC is higher than 96 percent of all global equities and portfolios over the last 90 days. You can use Centrica PLC to protect your portfolios against small market fluctuations. The stock experiences a normal downward trend and little activity. Check odds of Centrica PLC to be traded at 124.99 in 90 days.Good diversification
The correlation between Centrica PLC and DJI is -0.01 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Centrica PLC and DJI in the same portfolio, assuming nothing else is changed.
Centrica PLC Additional Risk Indicators
The analysis of Centrica PLC'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 Centrica PLC's investment and either accepting that risk or mitigating it. Along with some common measures of Centrica PLC 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 | 0.1069 | |||
| Market Risk Adjusted Performance | (9.33) | |||
| Mean Deviation | 292.67 | |||
| Semi Deviation | 2.32 | |||
| Downside Deviation | 17.54 | |||
| Coefficient Of Variation | 820.11 | |||
| Standard Deviation | 1207.17 |
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.
Centrica PLC 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 Centrica PLC 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. Centrica PLC'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, Centrica PLC'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 Centrica PLC.
Complementary Tools for Centrica Stock analysis
When running Centrica PLC's price analysis, check to measure Centrica PLC'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 Centrica PLC is operating at the current time. Most of Centrica PLC's value examination focuses on studying past and present price action to predict the probability of Centrica PLC's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Centrica PLC's price. Additionally, you may evaluate how the addition of Centrica PLC to your portfolios can decrease your overall portfolio volatility.
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