How Volatile is Halliburton?



Halliburton’s implied volatility

On September 2, 2016, Halliburton (HAL) had an implied volatility of ~30%. Since HAL’s 2Q16 financial results were announced on July 20, 2016, its implied volatility has increased from ~27% to the current level.

HAL makes up 0.13% of the iShares MSCI ACWI Low Carbon Target (CRBN). The energy sector makes up 5.8% of CRBN.

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What does implied volatility mean?

Implied volatility (or IV) reflects investors’ views of a stock’s potential movement. However, IV doesn’t forecast direction. Implied volatility is derived from an option pricing model. It’s worth noting that the correctness of an implied volatility suggested price can be uncertain. Oceaneering International’s (OII) implied volatility on September 2, 2016, was 40.4%, which is higher than HAL’s.

Energy stocks are typically correlated with crude oil prices. Has HAL’s correlation with the price of crude oil increased? Let’s find out in the next part of the series.


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