Some Fun Scenarios, FAQs & Making Sense of BlackBerry stock Movements
Question 1: Does a rise in BlackBerry stock become more likely after a drop?
Answer:
The chances of a 5% rise in BlackBerry stock over the next month:
= 37% after BLACKBERRY stock drops by 5% in a week
versus,
= 41% after BLACKBERRY stock rises by 5% in a week
Question 2: What about the other way around, does a drop in BlackBerry stock become more likely after a rise?
Answer:
Consider two cases
Case 1: BlackBerry stock drops by 5% in a week
Case 2: BlackBerry stock rises by 5% in a week
Turns out the chances of a 5% drop after Case 1 or Case 2 has occurred, is actually quite similar, both pretty close to 35%.
Question 3: Does patience pay?
Answer:
According to data and Trefis machine learning engine's calculations, only to an extent.
Given a drop of 5% in BlackBerry stock over a week (5 trading days), while there is only about 24% chance the BlackBerry stock will gain 5% over the subsequent week, there is a 37% chance this will happen in 1 month, and 41% chance it’ll gain 5% over a year (about 250 trading days).
The table below shows the trend:
Given a change of: Then chances BlackBerry stock will change: Likelihood =
-5% over 5 days, +5% over 1 day 11%
-5% over 5 days, +5% over 5 days 24%
-5% over 5 days, +5% over 10 days 31%
-5% over 5 days, +5% over 20 days 37%
-5% over 5 days, +5% over 60 days 42%
-5% over 5 days, +5% over 250 days 41%
Question 4: What about the possibility of a drop after a rise if you wait for a while?
Answer:
After seeing a rise of 5% over 5 days, the chances of a 5% drop in BLACKBERRY stock are about 44% over the subsequent quarter of waiting (60 trading days). This chance increases to about 53% when the waiting period is a year (250 trading days).
Given a change of: Then Chance That BlackBerry Stock will change: Likelihood =
+5% over 5 days, -5% over 1 day 10%
+5% over 5 days, -5% over 5 days 25%
+5% over 5 days, -5% over 10 days 33%
+5% over 5 days, -5% over 20 days 36%
+5% over 5 days, -5% over 60 days 44%
+5% over 5 days, -5% over 250 days 53%