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Volatility Analysis for Xcel Energy Inc.

Chapter II: Understanding Price Volatility behaviour is essential to assessing the risk associated with positions across different time spans.

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

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

For instance, on 7/1/2009 the average price was 18.62 with a range of 0.36, indicating a Daily Volatility of 1.9%. 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.

For reference, the price is plotted in red. 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 24 years, the Average Quarterly Volatility of XEL stock price has been 15% while the Average Daily Volatility has been 2%.



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Volatility Curve of Xcel Energy 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 XEL Volatility Curve, the increase is not constant.



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XEL:  Daily Volatility Histogram

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



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XEL:  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 Xcel Energy Inc. Volatility and Risk Behavior

Refined Volatility Risk Analysis for XEL :


Companies in the News:

In the news, Wednesday, July 01, 2009: An unfavorable condition has developed with Lexmark International, Inc., ticker symbol LXK. Also, there are breaking events concerning Lennar Corporation (LEN) and The Travelers Companies, Inc. (TRV)

More XEL Technical Analysis Topics

XEL Price Predictions

Support and Resistance Levels

Volume Stratification Analysis

Politics and Prices of XEL

Japanese Candlestick Analysis

XEL Classical Analysis of Time Series

XEL Historical Volume

XEL Seasonal Trends

Market Sentiment

Back to XEL Table of Contents


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