AECI (South Africa) Volatility
AFEP Stock | 1,501 51.00 3.52% |
Currently, AECI is very steady. AECI retains Efficiency (Sharpe Ratio) of 0.023, which signifies that the company had a 0.023% return per unit of risk over the last 3 months. We have found twenty-one technical indicators for AECI, which you can use to evaluate the volatility of the firm. Please confirm AECI's market risk adjusted performance of (0.34), and Variance of 1484992.52 to double-check if the risk estimate we provide is consistent with the expected return of 0.0315%. Key indicators related to AECI's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
AECI Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of AECI daily returns, and it is calculated using variance and standard deviation. We also use AECI's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of AECI volatility.
AECI |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as AECI can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of AECI at lower prices. For example, an investor can purchase AECI stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of AECI's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving against AECI Stock
AECI Market Sensitivity And Downside Risk
AECI's beta coefficient measures the volatility of AECI stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents AECI stock's returns against your selected market. In other words, AECI's beta of -428.67 provides an investor with an approximation of how much risk AECI stock can potentially add to one of your existing portfolios. AECI is displaying above-average volatility over the selected time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure AECI's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact AECI's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze AECI Demand TrendCheck current 90 days AECI correlation with market (Dow Jones Industrial)AECI Beta |
AECI standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 1.37 |
It is essential to understand the difference between upside risk (as represented by AECI's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of AECI's daily returns or price. Since the actual investment returns on holding a position in aeci stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in AECI.
AECI Stock Volatility Analysis
Volatility refers to the frequency at which AECI stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with AECI's price changes. Investors will then calculate the volatility of AECI's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of AECI's volatility:
Historical Volatility
This type of stock volatility measures AECI's fluctuations based on previous trends. It's commonly used to predict AECI's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for AECI's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on AECI's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. AECI Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
AECI Projected Return Density Against Market
Assuming the 90 days trading horizon AECI has a beta of -428.6716 . This suggests as returns on its benchmark rise, returns on holding AECI are expected to decrease by similarly larger amounts. On the other hand, during market turmoils, AECI is expected to outperform its benchmark.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to AECI or Basic Materials sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that AECI's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a AECI stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
AECI has an alpha of 204.7225, implying that it can generate a 204.72 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
Returns |
What Drives an AECI Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.AECI Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of AECI is 4350.66. The daily returns are distributed with a variance of 1.88 and standard deviation of 1.37. The mean deviation of AECI is currently at 0.34. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.76
α | Alpha over Dow Jones | 204.72 | |
β | Beta against Dow Jones | -428.67 | |
σ | Overall volatility | 1.37 | |
Ir | Information ratio | 0.12 |
AECI Stock Return Volatility
AECI historical daily return volatility represents how much of AECI stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 1.3696% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7502% volatility on return distribution over the 90 days horizon. Performance |
Timeline |
About AECI Volatility
Volatility is a rate at which the price of AECI or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of AECI may increase or decrease. In other words, similar to AECI's beta indicator, it measures the risk of AECI and helps estimate the fluctuations that may happen in a short period of time. So if prices of AECI fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.3 ways to utilize AECI's volatility to invest better
Higher AECI's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of AECI stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. AECI stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of AECI investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in AECI's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of AECI's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
AECI Investment Opportunity
AECI has a volatility of 1.37 and is 1.83 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of AECI is lower than 12 percent of all global equities and portfolios over the last 90 days. You can use AECI to enhance the returns of your portfolios. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of AECI to be traded at 1801.2 in 90 days.Very good diversification
The correlation between AECI and DJI is -0.27 (i.e., Very good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding AECI and DJI in the same portfolio, assuming nothing else is changed.
AECI Additional Risk Indicators
The analysis of AECI's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in AECI's investment and either accepting that risk or mitigating it. Along with some common measures of AECI stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Risk Adjusted Performance | 0.1041 | |||
Market Risk Adjusted Performance | (0.34) | |||
Mean Deviation | 295.45 | |||
Coefficient Of Variation | 812.24 | |||
Standard Deviation | 1218.6 | |||
Variance | 1484992.52 | |||
Information Ratio | 0.123 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
AECI Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against AECI as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. AECI's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, AECI's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to AECI.
Additional Tools for AECI Stock Analysis
When running AECI's price analysis, check to measure AECI's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy AECI is operating at the current time. Most of AECI's value examination focuses on studying past and present price action to predict the probability of AECI's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move AECI's price. Additionally, you may evaluate how the addition of AECI to your portfolios can decrease your overall portfolio volatility.