Dollar Stock Volatility

DLTR
 Stock
  

USD 136.88  1.35  0.98%   

Dollar Tree secures Sharpe Ratio (or Efficiency) of -0.0736, which denotes the company had -0.0736% of return per unit of risk over the last 3 months. Macroaxis standpoint towards predicting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Dollar Tree exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Dollar Tree mean deviation of 1.48, and Coefficient Of Variation of (1,525) to check the risk estimate we provide.
  
Dollar Tree 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 Dollar daily returns, and it is calculated using variance and standard deviation. We also use Dollar's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Dollar Tree volatility.

360 Days Market Risk

Very steady

Chance of Distress

Below Average

360 Days Economic Sensitivity

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

-0.65DQJCYDon QuijotePairCorr
-0.6BJBjs Wholesale ClubPairCorr
-0.59UNMUnumprovident CorpPairCorr

Dollar Tree Market Sensitivity And Downside Risk

Dollar Tree's beta coefficient measures the volatility of Dollar 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 Dollar stock's returns against your selected market. In other words, Dollar Tree's beta of 0.67 provides an investor with an approximation of how much risk Dollar Tree stock can potentially add to one of your existing portfolios.
Dollar Tree exhibits very low volatility with skewness of -1.78 and kurtosis of 6.31. However, we advise investors to further study Dollar Tree technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Dollar Tree'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 Dollar Tree'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 stocks as prices fall.
3 Months Beta |Analyze Dollar Tree Demand Trend
Check current 90 days Dollar Tree correlation with market (DOW)

Dollar Beta

    
  0.67  
Dollar 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

    
  2.33  
It is essential to understand the difference between upside risk (as represented by Dollar Tree's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Dollar Tree's daily returns or price. Since the actual investment returns on holding a position in dollar 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 Dollar Tree.

Using Dollar Put Option to Manage Risk

Put options written on Dollar Tree grant holders of the option the right to sell a specified amount of Dollar Tree at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Dollar Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Dollar Tree's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Dollar Tree will be realized, the loss incurred will be offset by the profits made with the option trade.

Dollar Tree's PUT expiring on 2022-09-30

   Profit   
Share
       Dollar Tree Price At Expiration  

Current Dollar Tree Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-09-30 PUT at $170.0-0.9480.0063322022-09-3030.8 - 32.124.5View
Put
2022-09-30 PUT at $165.0-0.94840.0073142022-09-3025.8 - 27.059.42View
Put
2022-09-30 PUT at $160.0-0.94870.0088112022-09-3020.8 - 22.020.27View
Put
2022-09-30 PUT at $155.0-0.93990.0128112022-09-3015.8 - 17.015.28View
Put
2022-09-30 PUT at $150.0-0.9070.02332022-09-3011.3 - 12.110.45View
Put
2022-09-30 PUT at $149.0-0.90220.0221222022-09-3010.2 - 11.16.55View
Put
2022-09-30 PUT at $148.0-0.87960.025662022-09-309.25 - 10.26.35View
Put
2022-09-30 PUT at $147.0-0.92290.024722022-09-308.6 - 9.35.5View
Put
2022-09-30 PUT at $146.0-0.88230.031782022-09-307.8 - 8.44.75View
Put
2022-09-30 PUT at $145.0-0.84480.0376642022-09-306.9 - 7.65.6View
Put
2022-09-30 PUT at $144.0-0.81930.0437282022-09-305.95 - 6.75.6View
View All Dollar Tree Options

Dollar Tree Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Dollar Tree's fluctuations based on previous trends. It's commonly used to predict Dollar Tree'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 Dollar Tree'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 Dollar Tree'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. Dollar Tree 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.
.

Dollar Tree Projected Return Density Against Market

Given the investment horizon of 90 days Dollar Tree has a beta of 0.6748 suggesting as returns on the market go up, Dollar Tree average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Dollar Tree 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 Dollar Tree or Consumer Defensive 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 Dollar Tree'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 Dollar 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 a negative alpha, implying that the risk taken by holding this instrument is not justified. Dollar Tree is significantly underperforming DOW.
   Predicted Return Density   
       Returns  
Dollar Tree's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how dollar 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 Dollar Tree Price Volatility?

Several factors can influence a Stock'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.

Dollar Tree 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 Dollar Tree or Consumer Defensive 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 Dollar Tree'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 Dollar 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. Given the investment horizon of 90 days the coefficient of variation of Dollar Tree is -1357.87. The daily returns are distributed with a variance of 5.42 and standard deviation of 2.33. The mean deviation of Dollar Tree is currently at 1.47. For similar time horizon, the selected benchmark (DOW) has volatility of 1.15
α
Alpha over DOW
-0.11
β
Beta against DOW0.67
σ
Overall volatility
2.33
Ir
Information ratio -0.04

Dollar Tree Stock Return Volatility

Dollar Tree historical daily return volatility represents how much of Dollar Tree stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The enterprise inherits 2.3289% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.1077% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About Dollar Tree Volatility

Volatility is a rate at which the price of Dollar Tree 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 Dollar Tree may increase or decrease. In other words, similar to Dollar's beta indicator, it measures the risk of Dollar Tree and helps estimate the fluctuations that may happen in a short period of time. So if prices of Dollar Tree 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.
The Dollar Tree segment offers merchandise at the fixed price of 1.25. The company was founded in 1986 and is based in Chesapeake, Virginia. Dollar Tree operates under Discount Stores classification in the United States and is traded on NASDAQ Exchange. It employs 61886 people.

Dollar Tree Investment Opportunity

Dollar Tree has a volatility of 2.33 and is 2.1 times more volatile than DOW. 20  of all equities and portfolios are less risky than Dollar Tree. Compared to the overall equity markets, volatility of historical daily returns of Dollar Tree is lower than 20 () of all global equities and portfolios over the last 90 days. Use Dollar Tree to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a moderate downward daily trend and can be a good diversifier. Check odds of Dollar Tree to be traded at $134.14 in 90 days.

Weak diversification

The correlation between Dollar Tree and DJI is 0.34 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and DJI in the same portfolio, assuming nothing else is changed.

Dollar Tree Additional Risk Indicators

The analysis of Dollar Tree'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 Dollar Tree's investment and either accepting that risk or mitigating it. Along with some common measures of Dollar Tree 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.
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.

Dollar Tree 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 Dollar Tree 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. Dollar Tree'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, Dollar Tree'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 Dollar Tree.
Continue to Investing Opportunities. You can also try Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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