How Volatile Is Halliburton?

Alex Chamberlin - Author

Oct. 7 2016, Updated 10:04 a.m. ET

Halliburton’s implied volatility

On October 5, 2016, Halliburton (HAL) had an implied volatility of 28.5%. Since Halliburton’s 2Q16 financial results were announced on July 20, 2016, its implied volatility rose from ~27% to the current level. Halliburton accounts for 0.14% of the iShares MSCI ACWI Low Carbon Target ETF (CRBN). The energy sector makes up 6% of CRBN.

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What does “implied volatility” mean?

Implied volatility reflects investors’ views of a stock’s potential movement. However, it doesn’t forecast direction. Implied volatility is derived from an option pricing model. Investors should note that the correctness of implied volatility suggested prices can be uncertain. In comparison, Oceaneering International’s (OII) implied volatility was 34% on October 5.

Energy stocks are usually correlated with crude oil prices. Has Halliburton’s correlation with the crude oil prices increased? We’ll discuss this in the next part.


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