Tencent Holdings (Germany) Volatility
| NNN1 Stock | EUR 53.00 2.00 3.92% |
Tencent Holdings appears to be very steady, given 3 months investment horizon. Tencent Holdings owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.1, which indicates the firm had a 0.1% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Tencent Holdings Ltd, which you can use to evaluate the volatility of the company. Please review Tencent Holdings' Risk Adjusted Performance of 0.0944, semi deviation of 2.22, and Coefficient Of Variation of 907.13 to confirm if our risk estimates are consistent with your expectations. Key indicators related to Tencent Holdings' volatility include:
180 Days Market Risk | Chance Of Distress | 180 Days Economic Sensitivity |
Tencent Holdings 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 Tencent daily returns, and it is calculated using variance and standard deviation. We also use Tencent's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Tencent Holdings volatility.
Tencent |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Tencent Holdings can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game as hey may decide to buy additional stocks of Tencent Holdings at lower prices to lower their average cost per share. Similarly, when the prices of Tencent Holdings' stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Moving together with Tencent Stock
Moving against Tencent Stock
Tencent Holdings Market Sensitivity And Downside Risk
Tencent Holdings' beta coefficient measures the volatility of Tencent 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 Tencent stock's returns against your selected market. In other words, Tencent Holdings's beta of 0.16 provides an investor with an approximation of how much risk Tencent Holdings stock can potentially add to one of your existing portfolios. Tencent Holdings Ltd currently demonstrates below-average downside deviation. It has Information Ratio of 0.1 and Jensen Alpha of 0.28. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Tencent Holdings' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Tencent Holdings' 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 Tencent Holdings Demand TrendCheck current 90 days Tencent Holdings correlation with market (Dow Jones Industrial)Tencent Beta |
Tencent 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 | 2.69 |
It is essential to understand the difference between upside risk (as represented by Tencent Holdings's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Tencent Holdings' daily returns or price. Since the actual investment returns on holding a position in tencent 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 Tencent Holdings.
Tencent Holdings Stock Volatility Analysis
Volatility refers to the frequency at which Tencent Holdings stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Tencent Holdings' price changes. Investors will then calculate the volatility of Tencent Holdings' 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 Tencent Holdings' volatility:
Historical Volatility
This type of stock volatility measures Tencent Holdings' fluctuations based on previous trends. It's commonly used to predict Tencent Holdings' 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 Tencent Holdings' 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 Tencent Holdings' 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. Tencent Holdings 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.
Tencent Holdings Projected Return Density Against Market
Assuming the 90 days trading horizon Tencent Holdings has a beta of 0.163 . This indicates as returns on the market go up, Tencent Holdings average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Tencent Holdings Ltd will be expected to be much smaller as well.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 Tencent Holdings or Technology 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 Tencent Holdings' 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 Tencent 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.
Tencent Holdings Ltd has an alpha of 0.2838, implying that it can generate a 0.28 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Tencent Holdings 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.Tencent Holdings Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Tencent Holdings is 996.01. The daily returns are distributed with a variance of 7.25 and standard deviation of 2.69. The mean deviation of Tencent Holdings Ltd is currently at 1.98. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.79
α | Alpha over Dow Jones | 0.28 | |
β | Beta against Dow Jones | 0.16 | |
σ | Overall volatility | 2.69 | |
Ir | Information ratio | 0.1 |
Tencent Holdings Stock Return Volatility
Tencent Holdings historical daily return volatility represents how much of Tencent Holdings stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company assumes 2.692% volatility of returns over the 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7982% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Tencent Holdings Volatility
Volatility is a rate at which the price of Tencent Holdings 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 Tencent Holdings may increase or decrease. In other words, similar to Tencent's beta indicator, it measures the risk of Tencent Holdings and helps estimate the fluctuations that may happen in a short period of time. So if prices of Tencent Holdings 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.Tencent Holdings Limited, an investment holding company, provides Internet value-added services and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countries, and internationally. The company was founded in 1998 and is headquartered in Shenzhen, the Peoples Republic of China. TENCENT HDGS operates under Internet Content Information classification in Germany and is traded on Frankfurt Stock Exchange. It employs 54623 people.
Tencent Holdings' stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Tencent Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Tencent Holdings' price varies over time.
3 ways to utilize Tencent Holdings' volatility to invest better
Higher Tencent Holdings' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Tencent Holdings 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. Tencent Holdings 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 Tencent Holdings investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Tencent Holdings' 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 Tencent Holdings' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Tencent Holdings Investment Opportunity
Tencent Holdings Ltd has a volatility of 2.69 and is 3.36 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Tencent Holdings Ltd is lower than 23 percent of all global equities and portfolios over the last 90 days. You can use Tencent Holdings Ltd to enhance the returns of your portfolios. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Tencent Holdings to be traded at €63.6 in 90 days.Significant diversification
The correlation between Tencent Holdings Ltd and DJI is 0.05 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings Ltd and DJI in the same portfolio, assuming nothing else is changed.
Tencent Holdings Additional Risk Indicators
The analysis of Tencent Holdings' 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 Tencent Holdings' investment and either accepting that risk or mitigating it. Along with some common measures of Tencent Holdings 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 | 0.0944 | |||
| Market Risk Adjusted Performance | 1.77 | |||
| Mean Deviation | 2.01 | |||
| Semi Deviation | 2.22 | |||
| Downside Deviation | 2.4 | |||
| Coefficient Of Variation | 907.13 | |||
| Standard Deviation | 2.7 |
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.
Tencent Holdings 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.
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 Tencent Holdings 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. Tencent Holdings' 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, Tencent Holdings' 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 Tencent Holdings Ltd.
Complementary Tools for Tencent Stock analysis
When running Tencent Holdings' price analysis, check to measure Tencent Holdings' 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 Tencent Holdings is operating at the current time. Most of Tencent Holdings' value examination focuses on studying past and present price action to predict the probability of Tencent Holdings' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Tencent Holdings' price. Additionally, you may evaluate how the addition of Tencent Holdings to your portfolios can decrease your overall portfolio volatility.
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