ATLASExpected range
Investing glossary · Models and probabilities
The band of prices within which a stock is expected to end up with a stated probability, such as 50% or 90%.
Definition
An expected range replaces one price forecast with a band and a probability. A 90% range from 85 to 130 says that, according to the model, nine out of ten outcomes should end between those two prices. A narrower 50% range shows the most likely half of outcomes.
Ranges are more honest than point forecasts because they show uncertainty. They widen with volatility and with the time horizon. A range is only trustworthy if it has been checked against what happened: if 90% ranges contain the outcome far less than 90% of the time, the model is overconfident.
Worked example
For Microsoft (MSFT), priced at $534.57, ATLAS gives a 50% range of $514.02 to $559.62 for the next month, and a 90% range of $476.70 to $603.43. The model estimates annual volatility at 24%.
Half of the outcomes should land inside the narrow band and nine out of ten inside the wide one, so one in ten should fall outside.
How ATLAS uses it
ATLAS publishes the 50% and 90% range of every stock, calibrated against past results so the stated probabilities match how often the outcome landed inside.
Related in ATLAS: Stock analysis →Browse all ATLAS tools →See it on a real stock
The example above uses these companies. Open their pages for the full numbers:
Frequently asked questions
What does a 90% range mean?
That the model expects nine out of ten outcomes to land inside it. About one in ten should land outside.
Why does the range get wider over time?
Because uncertainty accumulates: there are more days for the price to wander, so the spread of outcomes grows with the horizon.
Related terms
Put the idea to work on your own stocks
Open any company in ATLAS to see its fair value, its odds of rising and its risk numbers side by side.
Try ATLAS →Not investment advice. ATLAS estimates are produced by statistical models from public data; they can be wrong and past performance does not predict future results. Consider your own situation before investing. Disclaimer