Herzfeld Caribbean Basin Fund Volatility
| CUBA Fund | USD 2.47 0.02 0.82% |
At this point, Herzfeld Caribbean is slightly risky. Herzfeld Caribbean Basin holds Efficiency (Sharpe) Ratio of 0.13, which attests that the entity had a 0.13% return per unit of risk over the last 3 months. We have found thirty technical indicators for Herzfeld Caribbean Basin, which you can use to evaluate the volatility of the entity. Please check out Herzfeld Caribbean's Risk Adjusted Performance of 0.1039, downside deviation of 1.3, and Market Risk Adjusted Performance of 0.2509 to validate if the risk estimate we provide is consistent with the expected return of 0.14%. Key indicators related to Herzfeld Caribbean's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Herzfeld Caribbean Fund 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 Herzfeld daily returns, and it is calculated using variance and standard deviation. We also use Herzfeld's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Herzfeld Caribbean volatility.
Herzfeld |
Downward market volatility can be a perfect environment for investors who play the long game with Herzfeld Caribbean. They may decide to buy additional shares of Herzfeld Caribbean at lower prices to lower the average cost per share, thereby improving their portfolio's performance when markets normalize.
Moving together with Herzfeld Fund
| 0.67 | CHI | Calamos Convertible | PairCorr |
| 0.84 | CSQ | Calamos Strategic Total | PairCorr |
| 0.71 | CHY | Calamos Convertible And | PairCorr |
| 0.73 | STFGX | State Farm Growth | PairCorr |
Moving against Herzfeld Fund
| 0.84 | NNY | Nuveen New York | PairCorr |
| 0.81 | MXF | Mexico Closed | PairCorr |
| 0.58 | IIF | Morgan Stanley India | PairCorr |
| 0.33 | EIM | Eaton Vance Mbf | PairCorr |
Herzfeld Caribbean Market Sensitivity And Downside Risk
Herzfeld Caribbean's beta coefficient measures the volatility of Herzfeld fund 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 Herzfeld fund's returns against your selected market. In other words, Herzfeld Caribbean's beta of 0.57 provides an investor with an approximation of how much risk Herzfeld Caribbean fund can potentially add to one of your existing portfolios. Herzfeld Caribbean Basin has relatively low volatility with skewness of -0.2 and kurtosis of 0.83. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Herzfeld Caribbean's fund risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Herzfeld Caribbean's fund 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 Herzfeld Caribbean Basin Demand TrendCheck current 90 days Herzfeld Caribbean correlation with market (Dow Jones Industrial)Herzfeld Beta |
Herzfeld 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 | 1.06 |
It is essential to understand the difference between upside risk (as represented by Herzfeld Caribbean's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Herzfeld Caribbean's daily returns or price. Since the actual investment returns on holding a position in herzfeld fund 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 Herzfeld Caribbean.
Herzfeld Caribbean Basin Fund Volatility Analysis
Volatility refers to the frequency at which Herzfeld Caribbean fund price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Herzfeld Caribbean's price changes. Investors will then calculate the volatility of Herzfeld Caribbean's fund to predict their future moves. A fund that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A fund with relatively stable price changes has low volatility. A highly volatile fund 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 Herzfeld Caribbean's volatility:
Historical Volatility
This type of fund volatility measures Herzfeld Caribbean's fluctuations based on previous trends. It's commonly used to predict Herzfeld Caribbean's future behavior based on its past. However, it cannot conclusively determine the future direction of the fund.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Herzfeld Caribbean's current market price. This means that the fund will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Herzfeld Caribbean'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. Herzfeld Caribbean Basin 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.
Herzfeld Caribbean Projected Return Density Against Market
Given the investment horizon of 90 days Herzfeld Caribbean has a beta of 0.5685 suggesting as returns on the market go up, Herzfeld Caribbean average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Herzfeld Caribbean Basin 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 Herzfeld Caribbean or Financial Services 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 Herzfeld Caribbean's price will be affected by overall fund 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 Herzfeld fund'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.
Herzfeld Caribbean Basin has an alpha of 0.0857, implying that it can generate a 0.0857 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Herzfeld Caribbean Price Volatility?
Several factors can influence a fund'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.Herzfeld Caribbean Fund Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Herzfeld Caribbean is 783.29. The daily returns are distributed with a variance of 1.13 and standard deviation of 1.06. The mean deviation of Herzfeld Caribbean Basin is currently at 0.8. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.73
α | Alpha over Dow Jones | 0.09 | |
β | Beta against Dow Jones | 0.57 | |
σ | Overall volatility | 1.06 | |
Ir | Information ratio | 0.04 |
Herzfeld Caribbean Fund Return Volatility
Herzfeld Caribbean historical daily return volatility represents how much of Herzfeld Caribbean fund's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The fund inherits 1.0616% risk (volatility on return distribution) over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7242% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Herzfeld Caribbean Volatility
Volatility is a rate at which the price of Herzfeld Caribbean 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 Herzfeld Caribbean may increase or decrease. In other words, similar to Herzfeld's beta indicator, it measures the risk of Herzfeld Caribbean and helps estimate the fluctuations that may happen in a short period of time. So if prices of Herzfeld Caribbean 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.The Herzfeld Caribbean Basin Fund Inc. is a closed-ended equity mutual fund launched by Thomas J. Herzfeld Advisors, Inc. The fund is managed by HerzfeldCuba. It invests in the public equity markets of the United States. The fund employing fundamental analysis investing in stocks of companies that are likely to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin, which consist of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela. It invests in stocks of companies operating across diversified sectors. The Herzfeld Caribbean Basin Fund Inc. was formed on March 10, 1992 and is domiciled in the United States.
Herzfeld Caribbean's 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 Herzfeld Fund over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Herzfeld Caribbean's price varies over time.
3 ways to utilize Herzfeld Caribbean's volatility to invest better
Higher Herzfeld Caribbean's fund volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Herzfeld Caribbean Basin fund 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. Herzfeld Caribbean Basin fund 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 Herzfeld Caribbean Basin investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Herzfeld Caribbean's fund 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 Herzfeld Caribbean's fund relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Herzfeld Caribbean Investment Opportunity
Herzfeld Caribbean Basin has a volatility of 1.06 and is 1.47 times more volatile than Dow Jones Industrial. 9 percent of all equities and portfolios are less risky than Herzfeld Caribbean. You can use Herzfeld Caribbean Basin to enhance the returns of your portfolios. The fund experiences a moderate upward volatility. Check odds of Herzfeld Caribbean to be traded at $2.72 in 90 days.Weak diversification
The correlation between Herzfeld Caribbean Basin and DJI is 0.39 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Herzfeld Caribbean Basin and DJI in the same portfolio, assuming nothing else is changed.
Herzfeld Caribbean Additional Risk Indicators
The analysis of Herzfeld Caribbean'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 Herzfeld Caribbean's investment and either accepting that risk or mitigating it. Along with some common measures of Herzfeld Caribbean fund'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 | 0.1039 | |||
| Market Risk Adjusted Performance | 0.2509 | |||
| Mean Deviation | 0.799 | |||
| Semi Deviation | 0.9223 | |||
| Downside Deviation | 1.3 | |||
| Coefficient Of Variation | 719.62 | |||
| Standard Deviation | 1.06 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential funds, we recommend comparing similar funds with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Herzfeld Caribbean 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 Herzfeld Caribbean 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. Herzfeld Caribbean'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, Herzfeld Caribbean'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 Herzfeld Caribbean Basin.
Other Information on Investing in Herzfeld Fund
Herzfeld Caribbean financial ratios help investors to determine whether Herzfeld Fund is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Herzfeld with respect to the benefits of owning Herzfeld Caribbean security.
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