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Honeywell 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 Honeywell

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

For instance, on 2/4/2010 the average price was 38.42 with a range of 1.48, indicating a Daily Volatility of 3.8%. Daily Volatility (the daily range as a portion of the daily average price) is plotted in green. Blue is Weekly Volatility, which is the weekly range as a portion of the weekly average price. It is important to avoid confusing this with the weekly average of the daily volatility, which is a completely different concept.

The red plot shows the actual price. Volatility, as measured through various intervals, ( Daily, Weekly, Monthly and Quarterly) is plotted according to color.

According to academic theory, Volatility is exactly equal to Risk. But investors often make a distinction between these two concepts. The different character of Volatility as seen in different time frames, lends some support to the investor's view. During 30 years, the Average Quarterly Volatility of HON stock price has been 22% while the Average Daily Volatility has been 2%.



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Volatility Curve of Honeywell

If you have ever seen a "yield curve" you should be able to understand the concept behind this "yield curve". These Volatility Curves each apply to a discrete time interval. From left to right, each position plots the Volatility associated with increasing intervals of time. The relationship between the length of time, and the expected change in price, is not linear, as is demonstrated by this chart.



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Daily Volatility Histogram of Honeywell

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



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HON:  Quarterly Volatility Histogram

Similarly, the purple points on the top chart, the Quarterly Volatility Values, are subjected to frequency distribution here.

For Subscribers: Refined Analysis of Honeywell Volatility and Risk Behavior

Refined Volatility Risk Analysis for HON :


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 HON Technical Analysis Topics

HON Price Predictions

Support and Resistance Levels

Volume Stratification Analysis

Politics and Prices of HON

Japanese Candlestick Analysis

Momentum Investing Indicators

HON Classical Analysis of Time Series

HON Historical Volume

HON Seasonal Trends

Back to HON Table of Contents


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