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The TJX Companies, Inc. 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 The TJX Companies, Inc.

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 11/5/2010 of 1.2%, the price range for the day (0.57) was divided by the average price (46.92). 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. Volatility, as measured through various intervals, ( Daily, Weekly, Monthly and Quarterly) is plotted according to color.

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 TJX has been 3% in contrast to the Average Quarterly Volatility of 30%.



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Volatility Curve of The TJX Companies, Inc.

You may be familiar with the "yield curve" which shows how interest bearing yields vary according to term. 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 TJX Volatility Curve, the increase is not constant.



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TJX: 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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Quarterly Volatility Histogram of The TJX Companies, Inc.

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 The TJX Companies, Inc. Volatility and Risk Behavior

Refined Volatility Risk Analysis for TJX :

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 TJX Technical Analysis Topics

TJX Price Predictions

Support and Resistance Levels

Politics and Prices of TJX

Japanese Candlestick Analysis

TJX Classical Analysis of Time Series

TJX Historical Volume

TJX Seasonal Trends

Back to TJX Table of Contents


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