Expected price range for Valero stock
In this article, we’ll consider Valero Energy’s (VLO) implied volatility to forecast its stock price range leading up to March 29, 2019.
Implied volatility in Valero has fallen by 11 percentage points since January 2, 2019, to the current level of 29%. In the same period, Valero stock has risen 13%.
Considering Valero’s implied volatility of 29% and assuming a normal distribution of prices (using the bell curve model) and a standard deviation of one (with a probability of 68.2%), Valero’s stock price could close between $88.0 per share and $82.9 per share in the five days that end on March 29, 2019.
Peers’ implied volatilities
The implied volatilities in Phillips 66 (PSX), Delek US Holdings (DK), and HollyFrontier (HFC) have also fallen by ten percentage points, nine percentage points, and 12 percentage points, respectively, since January 2. Currently, the implied volatilities in PSX, DK, and HFC stand at 22%, 38%, and 31%, respectively. Phillips 66’s and Delek’s stock prices have risen 9% and 8%, respectively, in the stated period. HollyFrontier stock has fallen 1% since January 2.
The SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY) have seen similar trends in their implied volatilities, which have fallen by eight percentage points each since January 2 to their current levels of 15% each. In the same period, DIA and SPY have risen 10% and 12%, respectively.