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Volatility Analysis for Merck

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MRK:  Daily Volatility = Price Range as a percent of the daily average price.

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

For instance, on 1/28/2011 the average price was 33.26 with a range of 0.53, indicating a Daily Volatility of 1.5%. 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. This is a different concept from the weekly average of daily volatility.

The red plot shows the actual price. The remaining marks on the plot correspond to the Volatility measured across several time intervals.

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. Average Daily Volatility over the history of MRK has been 2% in contrast to the Average Quarterly Volatility of 20%.



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MRK:  Volatility Curve

You may be familiar with the "yield curve" which shows how interest bearing yields vary according to term. 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. However, as seen in this plot of the MRK Volatility Curve, the increase is not constant.



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MRK:  Daily Volatility Histogram

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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MRK:  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 Merck Volatility and Risk Behavior

Refined Volatility Risk Analysis for MRK :


Companies in the News:

In the news, Friday, February 18, 2011: An unfavorable condition has developed with Aetna Inc., ticker symbol AET. Also, there are breaking events concerning Dollar Tree, Inc. (DLTR) and First Niagara Financial Group Inc. (FNFG)

More MRK Technical Analysis Topics

MRK Price Predictions

Support and Resistance Levels

Politics and Prices of MRK

Japanese Candlestick Analysis

MRK Classical Analysis of Time Series

MRK Historical Volume

MRK Seasonal Trends

Market Sentiment

Back to MRK Table of Contents


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