Carpenter Technology Stock Volatility
| CRS Stock | USD 99.90 1.57 1.60% |
Carpenter Technology appears to be very steady, given 3 months investment horizon. Carpenter Technology secures Sharpe Ratio (or Efficiency) of 0.3, which signifies that the company had a 0.3% return per unit of risk over the last 3 months. By analyzing Carpenter Technology's technical indicators, you can evaluate if the expected return of 0.81% is justified by implied risk. Please makes use of Carpenter Technology's Mean Deviation of 1.88, risk adjusted performance of 0.1933, and Downside Deviation of 1.74 to double-check if our risk estimates are consistent with your expectations. Key indicators related to Carpenter Technology's volatility include:
60 Days Market Risk | Chance Of Distress | 60 Days Economic Sensitivity |
Carpenter Technology 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 Carpenter daily returns, and it is calculated using variance and standard deviation. We also use Carpenter's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Carpenter Technology volatility.
Carpenter |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Carpenter Technology 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 Carpenter Technology at lower prices. For example, an investor can purchase Carpenter 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 Carpenter Technology'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 Carpenter Stock
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Moving against Carpenter Stock
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| 0.57 | RYI | Ryerson Holding Corp Downward Rally | PairCorr |
| 0.49 | IIIN | Insteel Industries Financial Report 18th of July 2024 | PairCorr |
Carpenter Technology Market Sensitivity And Downside Risk
Carpenter Technology's beta coefficient measures the volatility of Carpenter 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 Carpenter stock's returns against your selected market. In other words, Carpenter Technology's beta of 0.12 provides an investor with an approximation of how much risk Carpenter Technology stock can potentially add to one of your existing portfolios. Carpenter Technology has relatively low volatility with skewness of 2.1 and kurtosis of 10.25. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Carpenter Technology'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 Carpenter Technology'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 Carpenter Technology Demand TrendCheck current 90 days Carpenter Technology correlation with market (NYSE Composite)Carpenter Beta |
Carpenter 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 | 2.71 |
It is essential to understand the difference between upside risk (as represented by Carpenter Technology's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Carpenter Technology's daily returns or price. Since the actual investment returns on holding a position in carpenter 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 Carpenter Technology.
Using Carpenter Put Option to Manage Risk
Put options written on Carpenter Technology grant holders of the option the right to sell a specified amount of Carpenter Technology 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 Carpenter Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Carpenter Technology'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 Carpenter Technology will be realized, the loss incurred will be offset by the profits made with the option trade.
Carpenter Technology's PUT expiring on 2024-05-17
Profit |
| Carpenter Technology Price At Expiration |
Current Carpenter Technology Insurance Chain
| Delta | Gamma | Open Int | Expiration | Current Spread | Last Price | |||
Put | 2024-05-17 PUT at $105.0 | -0.7183 | 0.043 | 7 | 2024-05-17 | 6.0 - 6.6 | 7.9 | View |
Put | 2024-05-17 PUT at $100.0 | -0.4816 | 0.0479 | 6 | 2024-05-17 | 3.0 - 3.3 | 3.3 | View |
Put | 2024-05-17 PUT at $95.0 | -0.2486 | 0.0395 | 129 | 2024-05-17 | 1.15 - 1.35 | 1.45 | View |
Put | 2024-05-17 PUT at $92.5 | -0.1665 | 0.0295 | 1 | 2024-05-17 | 0.65 - 0.8 | 0.78 | View |
Put | 2024-05-17 PUT at $90.0 | -0.0973 | 0.0204 | 5 | 2024-05-17 | 0.35 - 0.45 | 0.52 | View |
Put | 2024-05-17 PUT at $87.5 | -0.0621 | 0.0136 | 24 | 2024-05-17 | 0.2 - 0.3 | 0.27 | View |
Put | 2024-05-17 PUT at $85.0 | -0.0382 | 0.0088 | 21 | 2024-05-17 | 0.05 - 0.25 | 0.57 | View |
Put | 2024-05-17 PUT at $82.5 | -0.0337 | 0.0069 | 47 | 2024-05-17 | 0.05 - 0.25 | 0.4 | View |
Put | 2024-05-17 PUT at $80.0 | -0.0301 | 0.0055 | 95 | 2024-05-17 | 0.0 - 0.25 | 0.15 | View |
Carpenter Technology Stock Volatility Analysis
Volatility refers to the frequency at which Carpenter Technology stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Carpenter Technology's price changes. Investors will then calculate the volatility of Carpenter Technology'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 Carpenter Technology's volatility:
Historical Volatility
This type of stock volatility measures Carpenter Technology's fluctuations based on previous trends. It's commonly used to predict Carpenter Technology'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 Carpenter Technology'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 Carpenter Technology'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. Carpenter Technology 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.
Carpenter Technology Projected Return Density Against Market
Considering the 90-day investment horizon Carpenter Technology has a beta of 0.1157 suggesting as returns on the market go up, Carpenter Technology average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Carpenter Technology 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 Carpenter Technology 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 Carpenter Technology'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 Carpenter 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.
Carpenter Technology has an alpha of 0.7582, implying that it can generate a 0.76 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Carpenter Technology 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.Carpenter Technology Stock Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Carpenter Technology is 332.99. The daily returns are distributed with a variance of 7.33 and standard deviation of 2.71. The mean deviation of Carpenter Technology is currently at 1.91. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.64
α | Alpha over NYSE Composite | 0.76 | |
β | Beta against NYSE Composite | 0.12 | |
σ | Overall volatility | 2.71 | |
Ir | Information ratio | 0.27 |
Carpenter Technology Stock Return Volatility
Carpenter Technology historical daily return volatility represents how much of Carpenter Technology stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 2.7074% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.6266% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Carpenter Technology Volatility
Volatility is a rate at which the price of Carpenter Technology 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 Carpenter Technology may increase or decrease. In other words, similar to Carpenter's beta indicator, it measures the risk of Carpenter Technology and helps estimate the fluctuations that may happen in a short period of time. So if prices of Carpenter Technology 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 | ||
| Market Cap | 693.9 M | 437 M |
Carpenter Technology'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 Carpenter Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Carpenter Technology's price varies over time.
3 ways to utilize Carpenter Technology's volatility to invest better
Higher Carpenter Technology's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Carpenter Technology 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. Carpenter Technology 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 Carpenter Technology investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Carpenter Technology'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 Carpenter Technology's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Carpenter Technology Investment Opportunity
Carpenter Technology has a volatility of 2.71 and is 4.3 times more volatile than NYSE Composite. Compared to the overall equity markets, volatility of historical daily returns of Carpenter Technology is lower than 23 percent of all global equities and portfolios over the last 90 days. You can use Carpenter Technology to enhance the returns of your portfolios. The stock experiences a large bullish trend. Check odds of Carpenter Technology to be traded at $109.89 in 90 days.Significant diversification
The correlation between Carpenter Technology and NYA is 0.03 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and NYA in the same portfolio, assuming nothing else is changed.
Carpenter Technology Additional Risk Indicators
The analysis of Carpenter Technology'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 Carpenter Technology's investment and either accepting that risk or mitigating it. Along with some common measures of Carpenter Technology 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 | 0.1933 | |||
| Market Risk Adjusted Performance | 6.61 | |||
| Mean Deviation | 1.88 | |||
| Semi Deviation | 1.22 | |||
| Downside Deviation | 1.74 | |||
| Coefficient Of Variation | 346.4 | |||
| Standard Deviation | 2.68 |
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.
Carpenter Technology 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 Carpenter Technology 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. Carpenter Technology'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, Carpenter Technology'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 Carpenter Technology.
When determining whether Carpenter Technology is a strong investment it is important to analyze Carpenter Technology's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Carpenter Technology's future performance. For an informed investment choice regarding Carpenter Stock, refer to the following important reports: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Carpenter Technology. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in metropolitan statistical area. For more information on how to buy Carpenter Stock please use our How to Invest in Carpenter Technology guide.You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Complementary Tools for Carpenter Stock analysis
When running Carpenter Technology's price analysis, check to measure Carpenter Technology'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 Carpenter Technology is operating at the current time. Most of Carpenter Technology's value examination focuses on studying past and present price action to predict the probability of Carpenter Technology's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Carpenter Technology's price. Additionally, you may evaluate how the addition of Carpenter Technology to your portfolios can decrease your overall portfolio volatility.
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Is Carpenter Technology'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 Carpenter Technology. If investors know Carpenter 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 Carpenter Technology 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 5.8 | Dividend Share 0.8 | Earnings Share 2.89 | Revenue Per Share 55.43 | Quarterly Revenue Growth 0.078 |
The market value of Carpenter Technology is measured differently than its book value, which is the value of Carpenter that is recorded on the company's balance sheet. Investors also form their own opinion of Carpenter Technology's value that differs from its market value or its book value, called intrinsic value, which is Carpenter Technology'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 Carpenter Technology's market value can be influenced by many factors that don't directly affect Carpenter Technology'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 Carpenter Technology's value and its price as these two are different measures arrived at by different means. Investors typically determine if Carpenter Technology is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Carpenter Technology'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.