3M Stock Volatility

MMM
 Stock
  

USD 147.43  2.83  1.88%   

We consider 3M very steady. 3M Company retains Efficiency (Sharpe Ratio) of 0.0318, which signifies that the company had 0.0318% of return per unit of price deviation over the last 3 months. Our outlook to foreseeing 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-seven technical indicators for 3M, which you can use to evaluate the future volatility of the firm. Please confirm 3M Company Standard Deviation of 1.45, market risk adjusted performance of 0.0434, and Coefficient Of Variation of 4479.31 to double-check if the risk estimate we provide is consistent with the expected return of 0.0462%.
  
3M 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 3M daily returns, and it is calculated using variance and standard deviation. We also use 3M's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of 3M volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Follows the market closely

ESG Sustainability

While most ESG disclosures are voluntary, 3M's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to 3M's managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as 3M 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 3M at lower prices. For example, an investor can purchase 3M 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 3M'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 3M

0.76AIMCAltra Indtl MtnPairCorr
0.9AMEAMETEK IncPairCorr
0.81AOSSmith AO CorpPairCorr
0.65ATKRAtkore IncPairCorr
0.84BBarnes GroupPairCorr

3M Market Sensitivity And Downside Risk

3M's beta coefficient measures the volatility of 3M 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 3M stock's returns against your selected market. In other words, 3M's beta of 0.67 provides an investor with an approximation of how much risk 3M stock can potentially add to one of your existing portfolios.
3M Company has relatively low volatility with skewness of 0.32 and kurtosis of 2.39. However, we advise all investors to independently investigate 3M Company to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure 3M'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 3M'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.

3M Implied Volatility

3M's implied volatility exposes the market's sentiment of 3M Company stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if 3M'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 3M stock will not fluctuate a lot when 3M's options are near their expiration.
3 Months Beta |Analyze 3M Company Demand Trend
Check current 90 days 3M correlation with market (DOW)

3M Beta

    
  0.67  
3M 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

    
  1.46  
It is essential to understand the difference between upside risk (as represented by 3M's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of 3M's daily returns or price. Since the actual investment returns on holding a position in 3m 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 3M.

Using 3M Put Option to Manage Risk

Put options written on 3M grant holders of the option the right to sell a specified amount of 3M 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 3M Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge 3M'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 3M will be realized, the loss incurred will be offset by the profits made with the option trade.

3M's PUT expiring on 2022-08-19

   Profit   
Share
       3M Price At Expiration  

Current 3M Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-08-19 PUT at $205.0-0.89750.005312022-08-1955.9 - 56.661.08View
Put
2022-08-19 PUT at $200.0-0.89510.00572142022-08-1950.3 - 51.251.2View
Put
2022-08-19 PUT at $195.0-0.89220.00634262022-08-1945.25 - 46.246.15View
Put
2022-08-19 PUT at $190.0-0.88460.007122022-08-1940.75 - 41.661.7View
Put
2022-08-19 PUT at $185.0-0.87170.008272022-08-1935.9 - 36.6558.95View
Put
2022-08-19 PUT at $180.0-0.86880.009482022-08-1930.7 - 31.636.9View
Put
2022-08-19 PUT at $165.0-0.81430.0179112022-08-1915.75 - 16.6523.85View
Put
2022-08-19 PUT at $162.5-0.79850.02152022-08-1913.25 - 14.1514.5View
Put
2022-08-19 PUT at $160.0-0.78310.0255332022-08-1910.75 - 11.6511.13View
Put
2022-08-19 PUT at $157.5-0.750.031742022-08-198.25 - 9.1516.4View
Put
2022-08-19 PUT at $155.0-0.70870.0422252022-08-195.75 - 6.656.2View
View All 3M Options

3M Company Stock Volatility Analysis

Volatility refers to the frequency at which 3M stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with 3M's price changes. Investors will then calculate the volatility of 3M'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 3M's volatility:

Historical Volatility

This type of stock volatility measures 3M's fluctuations based on previous trends. It's commonly used to predict 3M'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 3M'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. 3M Company 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.
.

3M Projected Return Density Against Market

Considering the 90-day investment horizon 3M has a beta of 0.6686 . This indicates as returns on the market go up, 3M average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding 3M Company 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 3M 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 3M'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 3M 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. 3M Company is significantly underperforming DOW.
   Predicted Return Density   
       Returns  
3M's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how 3m 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 3M 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.

3M 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 3M 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 3M'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 3M 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 3M is 3149.26. The daily returns are distributed with a variance of 2.12 and standard deviation of 1.46. The mean deviation of 3M Company is currently at 1.03. For similar time horizon, the selected benchmark (DOW) has volatility of 1.25
α
Alpha over DOW
-0.05
β
Beta against DOW0.67
σ
Overall volatility
1.46
Ir
Information ratio -0.06

3M Stock Return Volatility

3M historical daily return volatility represents how much of 3M stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company has volatility of 1.4553% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.1712% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About 3M Volatility

Volatility is a rate at which the price of 3M 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 3M may increase or decrease. In other words, similar to 3M's beta indicator, it measures the risk of 3M and helps estimate the fluctuations that may happen in a short period of time. So if prices of 3M 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 Capitalization102.4 B110.6 B
3M Company operates as a diversified technology company worldwide. It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers. 3M operates under Conglomerates classification in the United States and is traded on New York Stock Exchange. It employs 95000 people.

3M Investment Opportunity

3M Company has a volatility of 1.46 and is 1.25 times more volatile than DOW. 12  of all equities and portfolios are less risky than 3M. Compared to the overall equity markets, volatility of historical daily returns of 3M Company is lower than 12 () of all global equities and portfolios over the last 90 days.
Use 3M Company to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of 3M to be traded at $143.01 in 90 days. .

Very weak diversification

The correlation between 3M Company and DJI is Very weak diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and DJI in the same portfolio, assuming nothing else is changed.

3M Additional Risk Indicators

The analysis of 3M'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 3M's investment and either accepting that risk or mitigating it. Along with some common measures of 3M 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 Performance0.0292
Market Risk Adjusted Performance0.0434
Mean Deviation1.04
Semi Deviation1.34
Downside Deviation1.42
Coefficient Of Variation4479.31
Standard Deviation1.45
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.

3M 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 3M 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. 3M'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, 3M'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 3M Company.
Additionally, see Stocks Correlation. Note that the 3M Company information on this page should be used as a complementary analysis to other 3M'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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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When running 3M Company price analysis, check to measure 3M'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 3M is operating at the current time. Most of 3M's value examination focuses on studying past and present price action to predict the probability of 3M's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move 3M's price. Additionally, you may evaluate how the addition of 3M to your portfolios can decrease your overall portfolio volatility.
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Is 3M'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 3M. If investors know 3M 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 3M 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
-0.95
Market Capitalization
86.3 B
Quarterly Revenue Growth YOY
-0.028
Return On Assets
0.0893
Return On Equity
0.29
The market value of 3M Company is measured differently than its book value, which is the value of 3M that is recorded on the company's balance sheet. Investors also form their own opinion of 3M's value that differs from its market value or its book value, called intrinsic value, which is 3M'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 3M's market value can be influenced by many factors that don't directly affect 3M'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 3M's value and its price as these two are different measures arrived at by different means. Investors typically determine 3M value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, 3M'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.