Houlihan Lokey Stock Volatility
| HLI Stock | USD 135.96 0.60 0.44% |
We consider Houlihan Lokey very steady. Houlihan Lokey holds Efficiency (Sharpe) Ratio of 0.0873, which attests that the entity had a 0.0873% return per unit of risk over the last 3 months. We have found twenty-seven technical indicators for Houlihan Lokey, which you can use to evaluate the volatility of the firm. Please check out Houlihan Lokey's Market Risk Adjusted Performance of 0.1069, risk adjusted performance of 0.0732, and Downside Deviation of 1.08 to validate if the risk estimate we provide is consistent with the expected return of 0.1%. Key indicators related to Houlihan Lokey's volatility include:
60 Days Market Risk | Chance Of Distress | 60 Days Economic Sensitivity |
Houlihan Lokey Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Houlihan daily returns, and it is calculated using variance and standard deviation. We also use Houlihan's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Houlihan Lokey volatility.
Houlihan |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Houlihan Lokey can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Houlihan Lokey at lower prices. For example, an investor can purchase Houlihan stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Houlihan Lokey's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving together with Houlihan Stock
| 0.77 | SF | Stifel Financial Financial Report 24th of July 2024 | PairCorr |
Houlihan Lokey Market Sensitivity And Downside Risk
Houlihan Lokey's beta coefficient measures the volatility of Houlihan stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Houlihan stock's returns against your selected market. In other words, Houlihan Lokey's beta of 1.31 provides an investor with an approximation of how much risk Houlihan Lokey stock can potentially add to one of your existing portfolios. Houlihan Lokey has relatively low volatility with skewness of 0.46 and kurtosis of -0.14. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Houlihan Lokey's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Houlihan Lokey's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Houlihan Lokey Demand TrendCheck current 90 days Houlihan Lokey correlation with market (NYSE Composite)Houlihan Beta |
Houlihan standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 1.18 |
It is essential to understand the difference between upside risk (as represented by Houlihan Lokey's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Houlihan Lokey's daily returns or price. Since the actual investment returns on holding a position in houlihan stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Houlihan Lokey.
Houlihan Lokey Stock Volatility Analysis
Volatility refers to the frequency at which Houlihan Lokey stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Houlihan Lokey's price changes. Investors will then calculate the volatility of Houlihan Lokey's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Houlihan Lokey's volatility:
Historical Volatility
This type of stock volatility measures Houlihan Lokey's fluctuations based on previous trends. It's commonly used to predict Houlihan Lokey's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Houlihan Lokey's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Houlihan Lokey's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Houlihan Lokey Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Houlihan Lokey Projected Return Density Against Market
Considering the 90-day investment horizon the stock has the beta coefficient of 1.3055 . This usually indicates as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Houlihan Lokey will likely underperform.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Houlihan Lokey or Capital Markets sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Houlihan Lokey's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Houlihan stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Houlihan Lokey has an alpha of 0.0385, implying that it can generate a 0.0385 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Houlihan Lokey Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Houlihan Lokey Stock Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Houlihan Lokey is 1145.37. The daily returns are distributed with a variance of 1.39 and standard deviation of 1.18. The mean deviation of Houlihan Lokey is currently at 0.92. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.62
α | Alpha over NYSE Composite | 0.04 | |
β | Beta against NYSE Composite | 1.31 | |
σ | Overall volatility | 1.18 | |
Ir | Information ratio | 0.05 |
Houlihan Lokey Stock Return Volatility
Houlihan Lokey historical daily return volatility represents how much of Houlihan Lokey stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 1.1801% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.5908% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Houlihan Lokey Volatility
Volatility is a rate at which the price of Houlihan Lokey or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Houlihan Lokey may increase or decrease. In other words, similar to Houlihan's beta indicator, it measures the risk of Houlihan Lokey and helps estimate the fluctuations that may happen in a short period of time. So if prices of Houlihan Lokey fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition , capital market, financial restructuring, and financial and valuation advisory services worldwide. The company was incorporated in 1972 and is headquartered in Los Angeles, California with offices in the United States, Europe, the Middle East, and the Asia-Pacific region. Houlihan Lokey operates under Capital Markets classification in the United States and is traded on New York Stock Exchange. It employs 2257 people.
Houlihan Lokey's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Houlihan Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Houlihan Lokey's price varies over time.
3 ways to utilize Houlihan Lokey's volatility to invest better
Higher Houlihan Lokey's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Houlihan Lokey stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Houlihan Lokey stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Houlihan Lokey investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Houlihan Lokey's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Houlihan Lokey's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Houlihan Lokey Investment Opportunity
Houlihan Lokey has a volatility of 1.18 and is 2.0 times more volatile than NYSE Composite. 10 percent of all equities and portfolios are less risky than Houlihan Lokey. You can use Houlihan Lokey to enhance the returns of your portfolios. The stock experiences a normal upward fluctuation. Check odds of Houlihan Lokey to be traded at $142.76 in 90 days.Poor diversification
The correlation between Houlihan Lokey and NYA is 0.65 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Houlihan Lokey and NYA in the same portfolio, assuming nothing else is changed.
Houlihan Lokey Additional Risk Indicators
The analysis of Houlihan Lokey's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Houlihan Lokey's investment and either accepting that risk or mitigating it. Along with some common measures of Houlihan Lokey stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0732 | |||
| Market Risk Adjusted Performance | 0.1069 | |||
| Mean Deviation | 0.9701 | |||
| Semi Deviation | 0.9554 | |||
| Downside Deviation | 1.08 | |||
| Coefficient Of Variation | 905.87 | |||
| Standard Deviation | 1.24 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Houlihan Lokey Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Houlihan Lokey as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Houlihan Lokey's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Houlihan Lokey's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Houlihan Lokey.
When determining whether Houlihan Lokey offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Houlihan Lokey's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Houlihan Lokey Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Houlihan Lokey Stock: Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in Houlihan Lokey. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis. For more detail on how to invest in Houlihan Stock please use our How to Invest in Houlihan Lokey guide.You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Complementary Tools for Houlihan Stock analysis
When running Houlihan Lokey's price analysis, check to measure Houlihan Lokey's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Houlihan Lokey is operating at the current time. Most of Houlihan Lokey's value examination focuses on studying past and present price action to predict the probability of Houlihan Lokey's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Houlihan Lokey's price. Additionally, you may evaluate how the addition of Houlihan Lokey to your portfolios can decrease your overall portfolio volatility.
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Is Houlihan Lokey's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Houlihan Lokey. If investors know Houlihan will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Houlihan Lokey listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Houlihan Lokey is measured differently than its book value, which is the value of Houlihan that is recorded on the company's balance sheet. Investors also form their own opinion of Houlihan Lokey's value that differs from its market value or its book value, called intrinsic value, which is Houlihan Lokey's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Houlihan Lokey's market value can be influenced by many factors that don't directly affect Houlihan Lokey's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Houlihan Lokey's value and its price as these two are different measures arrived at by different means. Investors typically determine if Houlihan Lokey is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Houlihan Lokey's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.