Lpl Financial Stock Volatility

LPLA
 Stock
  

USD 181.23  3.25  1.76%   

We consider Lpl Financial very steady. Lpl Financial Holdings has Sharpe Ratio of 0.006, which conveys that the firm had 0.006% of return per unit of risk over the last 3 months. Our standpoint towards 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 Lpl Financial, which you can use to evaluate the future volatility of the firm. Please verify Lpl Financial Holdings Downside Deviation of 3.27, risk adjusted performance of 0.0086, and Mean Deviation of 2.27 to check out if the risk estimate we provide is consistent with the expected return of 0.018%.
  
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Lpl Financial 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 Lpl Financial daily returns, and it is calculated using variance and standard deviation. We also use Lpl Financial's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Lpl Financial volatility.

720 Days Market Risk

Very steady

Chance of Distress

720 Days Economic Sensitivity

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

0.68AMRKA-Mark Precious Meta Fiscal Year End 8th of September 2022 PairCorr

Lpl Financial Market Sensitivity And Downside Risk

Lpl Financial's beta coefficient measures the volatility of Lpl Financial 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 Lpl Financial stock's returns against your selected market. In other words, Lpl Financial's beta of 1.4 provides an investor with an approximation of how much risk Lpl Financial stock can potentially add to one of your existing portfolios.
Let's try to break down what Lpl Financial's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Lpl Financial will likely underperform.
3 Months Beta |Analyze Lpl Financial Holdings Demand Trend
Check current 90 days Lpl Financial correlation with market (DOW)

Lpl Financial Beta

    
  1.4  
Lpl Financial 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

    
  2.98  
It is essential to understand the difference between upside risk (as represented by Lpl Financial's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Lpl Financial stock's daily returns or price. Since the actual investment returns on holding a position in Lpl Financial 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 Lpl Financial.

Lpl Financial Implied Volatility

    
  4.67  
Lpl Financial's implied volatility exposes the market's sentiment of Lpl Financial Holdings stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Lpl Financial's 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 Lpl Financial stock will not fluctuate a lot when Lpl Financial's options are near their expiration.

Lpl Financial Holdings Stock Volatility Analysis

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

Historical Volatility

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

Given the investment horizon of 90 days the stock has the beta coefficient of 1.395 . This 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, Lpl Financial 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 Lpl Financial or Financial Services 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 Lpl Financial 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 Lpl Financial 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 0.2646, implying that it can generate a 0.26 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
Lpl Financial's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Lpl Financial 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.

Lpl Financial 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 Lpl Financial or Financial Services 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 Lpl Financial 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 Lpl Financial 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 Lpl Financial is 16533.93. The daily returns are distributed with a variance of 8.87 and standard deviation of 2.98. The mean deviation of Lpl Financial Holdings is currently at 2.37. For similar time horizon, the selected benchmark (DOW) has volatility of 1.42
α
Alpha over DOW
0.26
β
Beta against DOW1.40
σ
Overall volatility
2.98
Ir
Information ratio 0.07

Lpl Financial Stock Return Volatility

Lpl Financial historical daily return volatility represents how much Lpl Financial stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company inherits 2.978% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.4875% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Lpl Financial Volatility

Volatility is a rate at which the price of Lpl Financial 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 Lpl Financial may increase or decrease. In other words, similar to Lpl Financial's beta indicator, it measures the risk of Lpl Financial and helps estimate the fluctuations that may happen in a short period of time. So if prices of Lpl Financial 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 Capitalization12.8 B13.8 B
LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California. Lpl Financial operates under Capital Markets classification in the United States and is traded on NASDAQ Exchange. It employs 6051000 people.

Lpl Financial Investment Opportunity

Lpl Financial Holdings has a volatility of 2.98 and is 2.0 times more volatile than DOW. 25  of all equities and portfolios are less risky than Lpl Financial. Compared to the overall equity markets, volatility of historical daily returns of Lpl Financial Holdings is lower than 25 () of all global equities and portfolios over the last 90 days. Use Lpl Financial Holdings to protect your portfolios against small market fluctuations. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of Lpl Financial to be traded at $173.79 in 90 days. . Let's try to break down what Lpl Financial's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Lpl Financial will likely underperform.

Poor diversification

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

Lpl Financial Additional Risk Indicators

The analysis of Lpl Financial'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 Lpl Financial's investment and either accepting that risk or mitigating it. Along with some common measures of Lpl Financial 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 Performance0.0086
Market Risk Adjusted Performance0.008
Mean Deviation2.27
Semi Deviation3.21
Downside Deviation3.27
Coefficient Of Variation39802.55
Standard Deviation2.88
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.

Lpl Financial 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 Lpl Financial 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. Lpl Financial'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, Lpl Financial'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 Lpl Financial Holdings.
Additionally, see Stocks Correlation. Note that the Lpl Financial Holdings information on this page should be used as a complementary analysis to other Lpl Financial's 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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When running Lpl Financial Holdings price analysis, check to measure Lpl Financial'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 Lpl Financial is operating at the current time. Most of Lpl Financial's value examination focuses on studying past and present price action to predict the probability of Lpl Financial's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Lpl Financial's price. Additionally, you may evaluate how the addition of Lpl Financial to your portfolios can decrease your overall portfolio volatility.
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Is Lpl Financial'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 Lpl Financial. If investors know Lpl Financial 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 Lpl Financial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.031
Market Capitalization
14.5 B
Quarterly Revenue Growth YOY
0.21
Return On Assets
0.0682
Return On Equity
0.29
The market value of Lpl Financial Holdings is measured differently than its book value, which is the value of Lpl Financial that is recorded on the company's balance sheet. Investors also form their own opinion of Lpl Financial's value that differs from its market value or its book value, called intrinsic value, which is Lpl Financial'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 Lpl Financial's market value can be influenced by many factors that don't directly affect Lpl Financial'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 Lpl Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine Lpl Financial value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Lpl Financial'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.