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Walt Disney Historical Volatility

Chapter II: Risks associated with short and long period price changes can be understood through Volatility Analysis. Here the impact of the Volatility Curve on the potential profitability positions across different time spans is shown.

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Daily Volatility = Price Range as a percent of the daily average price. of Walt Disney

Volatility is defined as the price range for a period, divided by the average price for the period:

So, to derive the Daily Volatility on 1/13/2010 of 1.6%, the price range for the day (0.50) was divided by the average price (31.12). 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. It is important to avoid confusing this with the weekly average of the daily volatility, which is a completely different concept.

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. During 30 years, the Average Quarterly Volatility of DIS stock price has been 23% while the Average Daily Volatility has been 2%.



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Volatility Curve of Walt Disney

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. From left to right, each position plots the Volatility associated with increasing intervals of time. However, as seen in this plot of the DIS Volatility Curve, the increase is not constant.



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Daily Volatility Histogram of Walt Disney

This histogram is a frequency distribution of Daily Volatility, corresponding to the green points on the first chart on this page.



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DIS:  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 Walt Disney Volatility and Risk Behavior

Refined Volatility Risk Analysis for DIS :


Companies in the News:

In the news, Friday, February 05, 2010: A favorable condition has developed with United Technologies, ticker symbol UTX. Also, there are breaking events concerning ACM Income Fund (ACG) and MicroSoft (MSFT)

More DIS Technical Analysis Topics

DIS Price Predictions

Support and Resistance Levels

Volume Stratification Analysis

Politics and Prices of DIS

Japanese Candlestick Analysis

DIS Classical Analysis of Time Series

DIS Historical Volume

DIS Seasonal Trends

Back to DIS Table of Contents


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