Mge Energy Stock Volatility

Moving together with MGE Stock

Moving against MGE Stock

MGE Energy Market Sensitivity And Downside Risk

3 Months Beta |Analyze MGE Energy Demand TrendCheck current 90 days MGE Energy correlation with market (NYSE Composite)

MGE Beta

0.96

Standard Deviation

2.77

Using MGE Put Option to Manage Risk

MGE Energy's PUT expiring on 2024-05-17

MGE Energy Stock Volatility Analysis

MGE Energy Projected Return Density Against Market

Given the investment horizon of 90 days MGE Energy has a beta of 0.9591 . This indicates MGE Energy market returns are highly-sensitive to returns on the market. As the market goes up or down, MGE Energy is expected to follow. MGE Energy has an alpha of 0.284, implying that it can generate a 0.28 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). MGE Energy's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how mge 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 MGE Energy 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.

MGE Energy Stock Risk Measures

MGE Energy Stock Return Volatility

MGE Energy historical daily return volatility represents how much of MGE Energy stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 2.7703% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6197% volatility on return distribution over the 90 days horizon.

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

MGE Energy'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 MGE Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much MGE Energy's price varies over time.

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

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 MGE 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. MGE 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, MGE 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 MGE Energy.

Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in MGE Energy. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in income. For information on how to trade MGE Stock refer to our How to Trade MGE Stock guide.Note that the MGE Energy information on this page should be used as a complementary analysis to other MGE Energy'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 the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

When running MGE Energy's price analysis, check to measure MGE 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 MGE Energy is operating at the current time. Most of MGE Energy's value examination focuses on studying past and present price action to predict the probability of MGE Energy's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move MGE Energy's price. Additionally, you may evaluate how the addition of MGE Energy to your portfolios can decrease your overall portfolio volatility.

Is MGE 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 MGE Energy. If investors know MGE 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 MGE Energy listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

The market value of MGE Energy is measured differently than its book value, which is the value of MGE that is recorded on the company's balance sheet. Investors also form their own opinion of MGE Energy's value that differs from its market value or its book value, called intrinsic value, which is MGE 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 MGE Energy's market value can be influenced by many factors that don't directly affect MGE 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 MGE Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if MGE Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, MGE 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.