Stock Alert and Holding Pattern: Oaktree Capital Group, LLC Price Volatility Hits An Amplified Level
news.cmlviz.com
menu
share


Stock Alert and Holding Pattern: Oaktree Capital Group, LLC Price Volatility Hits An Amplified Level




Oaktree Capital Group, LLC (NYSE:OAK) Price Volatility Hits An Amplified Level

Date Published:

Stock Alert and Holding Pattern
Before we cover the full analysis we make a quick alert here that Oaktree Capital Group, LLC (NYSE:OAK) has seen its stock price move at an amplified level. We'll go through the details below -- but that's the lede -- the stock has been behaving, roughly speaking, 'normally.' If there was a post it note to summarize the stock movement in the last 30-days it would likely read "holding pattern." The HV20 is 20.65% verus the HV20 of the S&P 500 at 6.48%.



But don't confuse a holding pattern with low risk -- this is quite possibly an inflection point.

Another bit to this holding pattern, which we cover in the article, is that while the historical volatility may be an amplified level, the real question that needs to be answered for option traders is not if the HV20 is high or low, but rather if the implied volatility that is priced for the next 30-days accuratley reflects what we're about to see in the stock for the next month.

To jump forward and examine if owning or shorting options has been a positive trade in Oaktree Capital Group, LLC, you can go here: Getting serious about option trading.

PREFACE
This is a proprietary realized volatility rating created by Capital Market Laboratories (CMLviz) based on a large number of data interactions for Oaktree Capital Group, LLC (NYSE:OAK) . We examine the little used gem of daily stock volatility over a 20-day and 30-day trading period, as well as comparisons to the last year and the actual stock returns over the last three- and six-months and the S&P 500 and Nasdaq 100 indices.
Option trading isn't about luck -- this four minute video will change your trading life forever: Option Trading and Truth

As a heads up, in the "Why This Matters" section at the end of this article on Oaktree Capital Group, LLC (NYSE:OAK) , we're going to take a step back and show really clearly that there is actually a lot less "luck" in successful option trading than most people are aware of. This idea of an "option trading expert" is vastly over complicated so those with the information advantage can continue to profit at the expense of the rest.

But before that, let's turn back to OAK. Here are the exact steps that led us to this rating, and whether it's a risk alert or a holding pattern.

OAK Recent Price Volatility


Rating
Price volatility using proprietary measures has hit an amplified level. Let's take a deep dive into some institutional level volatility measures for Oaktree Capital Group, LLC (NYSE:OAK) .

Oaktree Capital Group, LLC Stock Performance
OAK is down -4.8% over the last three months and down -6.7% over the last six months. The stock price is up +8.2% over the last year. The current stock price is $44.45.

OAK Step 1: Stock Returns
The one-year stock return does not impact the volatility rating since we are looking at a shorter time horizon. However, the rating does examine the 3-month returns and the absolute difference between the 3-month and 6-month returns.

  The 3-month stock return of -4.8% is too small to impact the price volatility rating for OAK.
  The small difference between the 3-month and 6-month stock returns does not impact the price volatility rating for OAK.

OAK Step 2: Daily Price Volatility Level
The HV30® takes the stock's day to day historical volatility over the last 30-days and then annualizes it. The HV20 looks back over just 20-days -- a shorter time period. Here is the breakdown for Oaktree Capital Group, LLC (NYSE:OAK) and how the day-by-day price historical volatilities have impacted the rating:

  The HV20 of 20.5% is low enough that it has a downward impact on OAK's volatility rating.


OAK Step 3: Oaktree Capital Group, LLC HV20 Compared to Indices
* The HV20 for OAK is substantially larger than that for both the S&P 500 and the NASDAQ 100 which raises the volatility rating.

* The HV20 for OAK is substantially larger than that for the Financials ETF (XLF) which raises the volatility rating.

Here is summary data in tabular and chart format.

           OAK
           HV20    
   S&P 500
HV20
   NASDAQ 100
HV20   
   XLF
HV20   
           20.5%    6.48%    10.12%    8.93%

OAK Step 4: Daily Volatility Percentiles and Highs

We also examine the annual high of the HV30 in our rating but in this case the 52 week high in HV30 for OAK is 22.1%, which is not enough to impact the price volatility rating.

Here is summary data in tabular and chart format.

           OAK
           HV20    
   OAK
HV30
   OAK
HV30 High   
           20.5%    20.7%    22.1%

Final Price Volatility Percentile Level: OAK
The final evolution of the volatility rating for Oaktree Capital Group, LLC is a comparison of the HV30 value relative to its past, which is neatly summarized in the percentile -- a scoring mechanism that goes from a low of 1 to a high of 100.

  The HV30 percentile for Oaktree Capital Group, LLC is 89%, which means the stock has seen highly volatile price movement relative to its own past and that has a substantial impact on the price volatility rating.

Oaktree Capital Group, LLC Realized Volatility Percentiles