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Where Encana’s Stock Could Settle in the Next 7 Days

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Encana’s implied volatility

As of December 21, 2017, Encana (ECA) had an implied volatility of ~33.7%, which is lower than its implied volatility of ~39.6% at the end of 3Q17. In the past week, Encana’s implied volatility rose from ~33.0% to ~33.7% due to an increase of ~8% in its stock price.

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Price range forecast

Based on Encana’s implied volatility of ~33.7%, assuming the normal distribution of prices, 365 days in a year, and standard deviation of one, its stock could close between $11.96 and $13.12 in the next seven calendar days. Encana stock will stay in this range 68% of the time. On December 21, Encana’s stock price closed at $12.54.

Peers’ price range forecasts

As of December 21, 2017, California Resources (CRC) has an implied volatility of ~65.1%. Its stock is expected to close between $18.73 and $15.63 in the next seven calendar days. On December 21, California Resources’ stock price closed at $17.18.

As of December 21, 2017, the SPDR Dow Jones Industrial Average ETF (DIA) has an implied volatility of 8.5%. DIA is expected to close between $250.57 and $244.75 in the next seven calendar days. On December 21, DIA’s price closed at $247.66.

Based on the inputs used to calculate the price range, there’s a 68% probability that these stocks will close in their range for the given period.

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