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Volatility Analysis for Alcoa Inc

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Daily Volatility = Price Range as a percent of the daily average price. of Alcoa Inc

This chart shows Volatility for Alcoa Inc, defined to be the price range as a portion of the average price:

For instance, on 3/11/2010 the average price was 13.54 with a range of 0.20, indicating a Daily Volatility of 1.4%. The Daily Volatility is obtained by dividing the daily range by the daily average. A longer Volatility period such as Weekly Volatility is obtained by dividing the weekly price range by the weekly mean price. This is a different concept from the weekly average of daily volatility.

For reference, the price is plotted in red. The remaining marks on the plot correspond to the Volatility measured across several time intervals.

Investors often make a distinction between the concept of Volatility, and the concept of Risk. Academics define them to be exactly equivalent, but as can be seen here, there is good reason to distinguish between the levels of volatility or risk experienced across different time frames. Average Daily Volatility over the history of AA has been 3% in contrast to the Average Quarterly Volatility of 25%.



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AA:  Volatility Curve

If you have ever seen a "yield curve" you should be able to understand the concept behind this "yield curve". Each Volatility Curve is a snapshot in time. As the timespan across which Volatility is measured increases, the Volatility is expected to increase. However, as seen in this plot of the AA Volatility Curve, the increase is not constant.



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Daily Volatility Histogram of Alcoa Inc

A frequency distribution of the green points on the first chart (the daily volatility) yields this histogram.



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AA:  Quarterly Volatility Histogram

In a similar vein, the Frequency Distribution of the Quarterly Volatility is plotted here. This is the distribution of the values plotted in purple on the top chart from this page.

For Subscribers: Refined Analysis of Alcoa Inc Volatility and Risk Behavior

Refined Volatility Risk Analysis for AA :


Companies in the News:

In the news, Thursday, March 18, 2010: An unfavorable condition has developed with MicroSoft, ticker symbol MSFT. Also, there are breaking events concerning AOL Time Warner (TWX) and Mylan Inc. (MYL)

More AA Technical Analysis Topics

AA Price Predictions

Support and Resistance Levels

Politics and Prices of AA

Japanese Candlestick Analysis

AA Classical Analysis of Time Series

AA Historical Volume

AA Seasonal Trends

Market Sentiment

Back to AA Table of Contents


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