Lam Research (Germany) Volatility
| LAR Stock | EUR 74.50 4.31 6.14% |
At this point, Lam Research is very steady. Lam Research has Sharpe Ratio of 0.063, which conveys that the firm had a 0.063% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Lam Research, which you can use to evaluate the volatility of the firm. Please verify Lam Research's Risk Adjusted Performance of 0.0405, mean deviation of 1.91, and Downside Deviation of 2.86 to check out if the risk estimate we provide is consistent with the expected return of 0.17%. Key indicators related to Lam Research's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Lam Research 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 Lam daily returns, and it is calculated using variance and standard deviation. We also use Lam's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Lam Research volatility.
Lam |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Lam Research 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 Lam Research at lower prices to lower their average cost per share. Similarly, when the prices of Lam Research's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Lam Research Market Sensitivity And Downside Risk
Lam Research's beta coefficient measures the volatility of Lam 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 Lam stock's returns against your selected market. In other words, Lam Research's beta of -0.25 provides an investor with an approximation of how much risk Lam Research stock can potentially add to one of your existing portfolios. Lam Research currently demonstrates below-average downside deviation. It has Information Ratio of 0.01 and Jensen Alpha of 0.13. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Lam Research'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 Lam Research'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 Lam Research Demand TrendCheck current 90 days Lam Research correlation with market (Dow Jones Industrial)Lam Beta |
Lam 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 | 2.65 |
It is essential to understand the difference between upside risk (as represented by Lam Research's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Lam Research's daily returns or price. Since the actual investment returns on holding a position in lam 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 Lam Research.
Lam Research Stock Volatility Analysis
Volatility refers to the frequency at which Lam Research stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Lam Research's price changes. Investors will then calculate the volatility of Lam Research'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 Lam Research's volatility:
Historical Volatility
This type of stock volatility measures Lam Research's fluctuations based on previous trends. It's commonly used to predict Lam Research'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 Lam Research'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 Lam Research's to be redeemed at a future date.Transformation |
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Lam Research Projected Return Density Against Market
Assuming the 90 days horizon Lam Research has a beta of -0.2483 . This indicates as returns on the benchmark increase, returns on holding Lam Research are expected to decrease at a much lower rate. During a bear market, however, Lam Research is likely to outperform the market.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 Lam Research or Technology 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 Lam Research'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 Lam 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.
Lam Research has an alpha of 0.1319, implying that it can generate a 0.13 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Lam Research 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.Lam Research Stock Risk Measures
Assuming the 90 days horizon the coefficient of variation of Lam Research is 1588.47. The daily returns are distributed with a variance of 7.01 and standard deviation of 2.65. The mean deviation of Lam Research is currently at 1.85. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.72
α | Alpha over Dow Jones | 0.13 | |
β | Beta against Dow Jones | -0.25 | |
σ | Overall volatility | 2.65 | |
Ir | Information ratio | 0.01 |
Lam Research Stock Return Volatility
Lam Research historical daily return volatility represents how much of Lam Research stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company shows 2.6473% volatility of returns over 90 . By contrast, Dow Jones Industrial accepts 0.7349% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Lam Research Volatility
Volatility is a rate at which the price of Lam Research 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 Lam Research may increase or decrease. In other words, similar to Lam's beta indicator, it measures the risk of Lam Research and helps estimate the fluctuations that may happen in a short period of time. So if prices of Lam Research 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.Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide. Lam Research Corporation was founded in 1980 and is headquartered in Fremont, California. LAM RESEARCH is traded on Frankfurt Stock Exchange in Germany.
Lam Research'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 Lam Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Lam Research's price varies over time.
3 ways to utilize Lam Research's volatility to invest better
Higher Lam Research's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Lam Research 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. Lam Research 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 Lam Research investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Lam Research'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 Lam Research's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Lam Research Investment Opportunity
Lam Research has a volatility of 2.65 and is 3.63 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Lam Research is lower than 23 percent of all global equities and portfolios over the last 90 days. You can use Lam Research to enhance the returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Lam Research to be traded at €93.13 in 90 days.Good diversification
The correlation between Lam Research and DJI is -0.07 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Lam Research and DJI in the same portfolio, assuming nothing else is changed.
Lam Research Additional Risk Indicators
The analysis of Lam Research'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 Lam Research's investment and either accepting that risk or mitigating it. Along with some common measures of Lam Research 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 | 0.0405 | |||
| Market Risk Adjusted Performance | (0.45) | |||
| Mean Deviation | 1.91 | |||
| Semi Deviation | 2.7 | |||
| Downside Deviation | 2.86 | |||
| Coefficient Of Variation | 2172.35 | |||
| 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.
Lam Research 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 Lam Research 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. Lam Research'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, Lam Research'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 Lam Research.
Complementary Tools for Lam Stock analysis
When running Lam Research's price analysis, check to measure Lam Research'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 Lam Research is operating at the current time. Most of Lam Research's value examination focuses on studying past and present price action to predict the probability of Lam Research's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Lam Research's price. Additionally, you may evaluate how the addition of Lam Research to your portfolios can decrease your overall portfolio volatility.
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