Genuine Stock Volatility

GPC -  USA Stock  

USD 139.18  3.14  2.31%

Genuine Parts appears to be very steady, given 3 months investment horizon. Genuine Parts holds Efficiency (Sharpe) Ratio of 0.13, which attests that the entity had 0.13% of return per unit of risk over the last 3 months. Our standpoint towards determining 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-eight technical indicators for Genuine Parts, which you can use to evaluate the future volatility of the firm. Please utilize Genuine Parts' Downside Deviation of 1.79, market risk adjusted performance of 0.2563, and Risk Adjusted Performance of 0.1957 to validate if our risk estimates are consistent with your expectations.
  
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Genuine Parts 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 Genuine daily returns, and it is calculated using variance and standard deviation. We also use Genuine's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Genuine Parts volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Almost mirrors the market
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Genuine Parts 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 Genuine Parts at lower prices. For example, an investor can purchase Genuine 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 Genuine Parts' 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 Genuine Parts

0.9MUSAMurphy USAPairCorr
0.85ASHAshland Global Holdings Fiscal Year End 8th of November 2022 PairCorr
0.82ANCTFAlimentat Cou MulvtgPairCorr
0.82ELAEnvela CorpPairCorr
0.8MRKMerck CompanyPairCorr
0.79BDLFlanigans EnterprisesPairCorr

Moving against Genuine Parts

-0.85COSMCosmos HoldingsPairCorr
-0.82KIRKKirklands Aggressive PushPairCorr
-0.81NCLTFNitori HoldingsPairCorr
-0.76BQBoqii HoldingPairCorr
-0.75FXLVF45 Training HoldingsPairCorr
-0.74HLFHerbalifePairCorr
-0.72BFIBurgerfi IntlPairCorr

Genuine Parts Market Sensitivity And Downside Risk

Genuine Parts' beta coefficient measures the volatility of Genuine 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 Genuine stock's returns against your selected market. In other words, Genuine Parts's beta of 0.93 provides an investor with an approximation of how much risk Genuine Parts stock can potentially add to one of your existing portfolios.
Let's try to break down what Genuine's beta means in this case. Genuine Parts returns are very sensitive to returns on the market. As the market goes up or down, Genuine Parts is expected to follow.
3 Months Beta |Analyze Genuine Parts Demand Trend
Check current 90 days Genuine Parts correlation with market (DOW)

Genuine Beta

    
  0.93  
Genuine 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

    
  1.68  
It is essential to understand the difference between upside risk (as represented by Genuine Parts's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Genuine Parts stock's daily returns or price. Since the actual investment returns on holding a position in Genuine Parts 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 Genuine Parts.

Genuine Parts Implied Volatility

    
  26.24  
Genuine Parts' implied volatility exposes the market's sentiment of Genuine Parts stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Genuine Parts' 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 Genuine Parts stock will not fluctuate a lot when Genuine Parts' options are near their expiration.

Genuine Parts Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Genuine Parts' fluctuations based on previous trends. It's commonly used to predict Genuine Parts' 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 Genuine Parts' 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. Genuine Parts 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.
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Genuine Parts Projected Return Density Against Market

Considering the 90-day investment horizon Genuine Parts has a beta of 0.9303 . This usually indicates Genuine Parts market returns are sensitive to returns on the market. As the market goes up or down, Genuine Parts is expected to follow.
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 Genuine Parts or Consumer Cyclical 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 Genuine Parts 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 Genuine 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 0.2303, implying that it can generate a 0.23 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
Genuine Parts' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Genuine Parts 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.

Genuine Parts 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 Genuine Parts or Consumer Cyclical 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 Genuine Parts 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 Genuine 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 Genuine Parts is 743.08. The daily returns are distributed with a variance of 2.82 and standard deviation of 1.68. The mean deviation of Genuine Parts is currently at 1.27. For similar time horizon, the selected benchmark (DOW) has volatility of 1.37
α
Alpha over DOW
0.23
β
Beta against DOW0.93
σ
Overall volatility
1.68
Ir
Information ratio 0.14

Genuine Parts Stock Return Volatility

Genuine Parts historical daily return volatility represents how much Genuine Parts 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 1.6789% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.3427% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Genuine Parts Volatility

Volatility is a rate at which the price of Genuine Parts 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 Genuine Parts may increase or decrease. In other words, similar to Genuine's beta indicator, it measures the risk of Genuine Parts and helps estimate the fluctuations that may happen in a short period of time. So if prices of Genuine Parts 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 Capitalization20 B18.6 B
Genuine Parts Company distributes automotive replacement parts, and industrial parts and materials. The company was incorporated in 1928 and is headquartered in Atlanta, Georgia. Genuine Parts operates under Specialty Retail classification in the United States and is traded on New York Stock Exchange. It employs 52000 people.

Nearest Genuine long CALL Option Payoff at Expiration

Genuine Parts' implied volatility is one of the determining factors in the pricing options written on Genuine Parts. Implied volatility approximates the future value of Genuine Partsusing the option's current value. Options with high implied volatility have higher premiums and can be used to hedge the downside of investing in Genuine Parts over a specific time period.
View All Genuine options
2022-06-17 CALL at $70.0 is a CALL option contract on Genuine Parts' common stock with a strick price of 70.0 expiring on 2022-06-17. The contract was not traded in recent days and, as of today, has 20 days remaining before the expiration. The option is currently trading at a bid price of $66.5, and an ask price of $71.4. The implied volatility as of the 28th of May is 221.4243.
 Profit 
Share
      Genuine Parts Price At Expiration 

Genuine Parts Investment Opportunity

Genuine Parts has a volatility of 1.68 and is 1.25 times more volatile than DOW. 14  of all equities and portfolios are less risky than Genuine Parts. Compared to the overall equity markets, volatility of historical daily returns of Genuine Parts is lower than 14 () of all global equities and portfolios over the last 90 days. Use Genuine Parts to enhance returns of your portfolios. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Genuine Parts to be traded at $167.02 in 90 days. . Let's try to break down what Genuine's beta means in this case. Genuine Parts returns are very sensitive to returns on the market. As the market goes up or down, Genuine Parts is expected to follow.

Poor diversification

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

Genuine Parts Additional Risk Indicators

The analysis of Genuine Parts' 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 Genuine Parts' investment and either accepting that risk or mitigating it. Along with some common measures of Genuine Parts 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 Performance0.1957
Market Risk Adjusted Performance0.2563
Mean Deviation1.29
Semi Deviation1.65
Downside Deviation1.79
Coefficient Of Variation706.8
Standard Deviation1.69
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.

Genuine Parts 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 Genuine Parts 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. Genuine Parts' 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, Genuine Parts' 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 Genuine Parts.
Please check Risk vs Return Analysis. Note that the Genuine Parts information on this page should be used as a complementary analysis to other Genuine Parts' 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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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Is Genuine Parts' 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 Genuine Parts. If investors know Genuine 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 Genuine Parts 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 Genuine Parts is measured differently than its book value, which is the value of Genuine that is recorded on the company's balance sheet. Investors also form their own opinion of Genuine Parts' value that differs from its market value or its book value, called intrinsic value, which is Genuine Parts' 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 Genuine Parts' market value can be influenced by many factors that don't directly affect Genuine Parts' 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 Genuine Parts' value and its price as these two are different measures arrived at by different means. Investors typically determine Genuine Parts value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Genuine Parts' 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.