![]() ![]() Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. Political and Economic environmentWhen governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. 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. The direct result will be the rise in the stock price of oil distribution companies. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. What Drives a Xcel Energy Price Volatility?Several factors can influence a stock's market volatility: IndustrySpecific events can influence volatility within a particular industry. Standard deviation will reflect the average amount of how xcel 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. Xcel Energy's volatility is measured either by using standard deviation or beta. Xcel Energy is significantly underperforming NYSE Composite. The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. Beta and standard deviation are two commonly used measures to help you make the right decision. However, you can measure a Xcel stock's historical response to market movements and buy it if you are comfortable with its volatility direction. So, no matter how many positions you have, you cannot eliminate market risk. ![]() On the other hand, systematic risk is the risk that Xcel Energy's price will be affected by overall stock market movements and cannot be diversified away. 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. Unsystematic risk is the risk that events specific to Xcel Energy or Electric Utilities sector will adversely affect the stock's price. Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. This type of volatility can be derived from derivative instruments written on Xcel Energy's to be redeemed at a future date. This means that the stock will return to its initially predicted market price. Implied VolatilityThis type of volatility provides a positive outlook on future price fluctuations for Xcel Energy's current market price. However, it cannot conclusively determine the future direction of the stock. It's commonly used to predict Xcel Energy's future behavior based on its past. There are two main types of Xcel Energy's volatility: Historical VolatilityThis type of stock volatility measures Xcel Energy's fluctuations based on previous trends. Investing in highly volatile security can either be highly successful, or you may experience significant failure. A highly volatile stock is riskier, but the risk cuts both ways. A stock with relatively stable price changes has low volatility. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. Investors will then calculate the volatility of Xcel Energy's stock to predict their future moves. ![]() These fluctuations usually indicate the level of risk that's associated with Xcel Energy's price changes. Volatility refers to the frequency at which Xcel Energy stock price increases or decreases within a specified period. ![]()
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