L3Harris Stock Volatility

LHX -  USA Stock  

USD 237.66  3.83  1.64%

We consider L3Harris Technologies very steady. L3Harris Technologies has Sharpe Ratio of 0.0813, which conveys that the company had 0.0813% of return per unit of risk over the last 3 months. Our outlook to estimating the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for L3Harris Technologies, which you can use to evaluate the future volatility of the entity. Please verify L3Harris Technologies Semi Deviation of 1.93, mean deviation of 1.56, and Downside Deviation of 2.08 to check out if the risk estimate we provide is consistent with the expected return of 0.18%.
  
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L3Harris Technologies 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 L3Harris daily returns, and it is calculated using variance and standard deviation. We also use L3Harris's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of L3Harris Technologies volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Follows the market closely
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as L3Harris Technologies 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 L3Harris Technologies at lower prices. For example, an investor can purchase L3Harris 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 L3Harris Technologies' 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 L3Harris Technologies

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0.8GDGeneral Dynamics CorpPairCorr
0.74RTXRaytheon TechnologiesPairCorr
0.73BHBiglari HoldingsPairCorr

Moving against L3Harris Technologies

-0.55AIRGAirgainPairCorr

L3Harris Technologies Market Sensitivity And Downside Risk

L3Harris Technologies' beta coefficient measures the volatility of L3Harris stock compared to the systematic risk of the entire stock 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 L3Harris stock's returns against your selected market. In other words, L3Harris Technologies's beta of 0.17 provides an investor with an approximation of how much risk L3Harris Technologies stock can potentially add to one of your existing portfolios.
Let's try to break down what L3Harris's beta means in this case. As returns on the market increase, L3Harris Technologies returns are expected to increase less than the market. However, during the bear market, the loss on holding L3Harris Technologies will be expected to be smaller as well.
3 Months Beta |Analyze L3Harris Technologies Demand Trend
Check current 90 days L3Harris Technologies correlation with market (DOW)

L3Harris Beta

    
  0.17  
L3Harris standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity 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

    
  2.18  
It is essential to understand the difference between upside risk (as represented by L3Harris Technologies's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of L3Harris Technologies stock's daily returns or price. Since the actual investment returns on holding a position in L3Harris Technologies 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 L3Harris Technologies.

L3Harris Technologies Implied Volatility

    
  42.16  
L3Harris Technologies' implied volatility exposes the market's sentiment of L3Harris Technologies stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if L3Harris Technologies' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that L3Harris Technologies stock will not fluctuate a lot when L3Harris Technologies' options are near their expiration.

L3Harris Technologies Stock Volatility Analysis

Volatility refers to the frequency at which L3Harris Technologies stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with L3Harris Technologies' price changes. Investors will then calculate the volatility of L3Harris Technologies' 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 L3Harris Technologies' volatility:

Historical Volatility

This type of stock volatility measures L3Harris Technologies' fluctuations based on previous trends. It's commonly used to predict L3Harris Technologies' 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 L3Harris Technologies' current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Developed by Larry Williams, the Weighted Close is the average of L3Harris Technologies high, low and close of a chart with the close values weighted twice. It can be used to smooth an indicator that normally takes only L3Harris Technologies closing price as input.
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L3Harris Technologies Projected Return Density Against Market

Considering the 90-day investment horizon L3Harris Technologies has a beta of 0.165 . This indicates as returns on the market go up, L3Harris Technologies average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding L3Harris Technologies will be expected to be much smaller as well.
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 L3Harris Technologies or Industrials 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 L3Harris Technologies stock'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 L3Harris 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.
The company has an alpha of 0.1693, implying that it can generate a 0.17 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
L3Harris Technologies' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how L3Harris Technologies stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Company's Stock Price Volatility?

Several factors can influence a company's stock 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.

L3Harris Technologies Stock Risk Measures

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 L3Harris Technologies or Industrials 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 L3Harris Technologies stock'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 L3Harris 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.
Considering the 90-day investment horizon the coefficient of variation of L3Harris Technologies is 1229.46. The daily returns are distributed with a variance of 4.76 and standard deviation of 2.18. The mean deviation of L3Harris Technologies is currently at 1.58. For similar time horizon, the selected benchmark (DOW) has volatility of 1.36
α
Alpha over DOW
0.17
β
Beta against DOW0.17
σ
Overall volatility
2.18
Ir
Information ratio 0.12

L3Harris Technologies Stock Return Volatility

L3Harris Technologies historical daily return volatility represents how much L3Harris Technologies stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company has volatility of 2.1818% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.376% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About L3Harris Technologies Volatility

Volatility is a rate at which the price of L3Harris Technologies 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 L3Harris Technologies may increase or decrease. In other words, similar to L3Harris's beta indicator, it measures the risk of L3Harris Technologies and helps estimate the fluctuations that may happen in a short period of time. So if prices of L3Harris Technologies 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.
Last ReportedProjected for 2022
Market Capitalization41.8 B45.1 B
L3Harris Technologies, Inc., an aerospace and defense technology company, provides mission-critical solutions for government and commercial customers worldwide. L3Harris Technologies, Inc. was founded in 1895 and is headquartered in Melbourne, Florida. L3Harris Technologies operates under Aerospace Defense classification in the United States and is traded on New York Stock Exchange. It employs 47000 people.

Nearest L3Harris long CALL Option Payoff at Expiration

L3Harris Technologies' implied volatility is one of the determining factors in the pricing options written on L3Harris Technologies. Implied volatility approximates the future value of L3Harris Technologiesusing the option's current value. Options with high implied volatility have higher premiums and can be used to hedge the downside of investing in L3Harris Technologies over a specific time period.
View All L3Harris options
2022-06-17 CALL at $125.0 is a CALL option contract on L3Harris Technologies' common stock with a strick price of 125.0 expiring on 2022-06-17. The contract was not traded in recent days and, as of today, has 23 days remaining before the expiration. The option is currently trading at a bid price of $110.2, and an ask price of $114.5. The implied volatility as of the 24th of May is 165.2933.
 Profit 
Share
      L3Harris Technologies Price At Expiration 

L3Harris Technologies Investment Opportunity

L3Harris Technologies has a volatility of 2.18 and is 1.58 times more volatile than DOW. 18  of all equities and portfolios are less risky than L3Harris Technologies. Compared to the overall equity markets, volatility of historical daily returns of L3Harris Technologies is lower than 18 () of all global equities and portfolios over the last 90 days. Use L3Harris Technologies to enhance returns of your portfolios. The stock experiences a large bullish trend. Check odds of L3Harris Technologies to be traded at $261.43 in 90 days. . Let's try to break down what L3Harris's beta means in this case. As returns on the market increase, L3Harris Technologies returns are expected to increase less than the market. However, during the bear market, the loss on holding L3Harris Technologies will be expected to be smaller as well.

Average diversification

The correlation between L3Harris Technologies and DJI is Average diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and DJI in the same portfolio, assuming nothing else is changed.

L3Harris Technologies Additional Risk Indicators

The analysis of L3Harris Technologies' 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 L3Harris Technologies' investment and either accepting that risk or mitigating it. Along with some common measures of L3Harris Technologies stock 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 Performance0.1061
Market Risk Adjusted Performance0.9366
Mean Deviation1.56
Semi Deviation1.93
Downside Deviation2.08
Coefficient Of Variation1323.32
Standard Deviation2.16
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

L3Harris Technologies 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.
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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 L3Harris Technologies 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. L3Harris Technologies' 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, L3Harris Technologies' 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 L3Harris Technologies.
Additionally, see Stocks Correlation. Note that the L3Harris Technologies information on this page should be used as a complementary analysis to other L3Harris Technologies' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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When running L3Harris Technologies price analysis, check to measure L3Harris Technologies' 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 L3Harris Technologies is operating at the current time. Most of L3Harris Technologies' value examination focuses on studying past and present price action to predict the probability of L3Harris Technologies' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move L3Harris Technologies' price. Additionally, you may evaluate how the addition of L3Harris Technologies to your portfolios can decrease your overall portfolio volatility.
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Is L3Harris Technologies' 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 L3Harris Technologies. If investors know L3Harris 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 L3Harris Technologies 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 L3Harris Technologies is measured differently than its book value, which is the value of L3Harris that is recorded on the company's balance sheet. Investors also form their own opinion of L3Harris Technologies' value that differs from its market value or its book value, called intrinsic value, which is L3Harris Technologies' 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 L3Harris Technologies' market value can be influenced by many factors that don't directly affect L3Harris Technologies' 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 L3Harris Technologies' value and its price as these two are different measures arrived at by different means. Investors typically determine L3Harris Technologies value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, L3Harris Technologies' 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.