Defense Metals Corp Stock Volatility
| DEFN Stock | CAD 0.14 0.01 7.69% |
Defense Metals appears to be out of control, given 3 months investment horizon. Defense Metals Corp secures Sharpe Ratio (or Efficiency) of 0.13, which denotes the company had a 0.13% return per unit of risk over the last 3 months. By reviewing Defense Metals' technical indicators, you can evaluate if the expected return of 0.99% is justified by implied risk. Please utilize Defense Metals' Coefficient Of Variation of 802.11, downside deviation of 9.07, and Mean Deviation of 5.81 to check if our risk estimates are consistent with your expectations. Key indicators related to Defense Metals' volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Defense Metals 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 Defense daily returns, and it is calculated using variance and standard deviation. We also use Defense's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Defense Metals volatility.
Defense |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Defense Metals 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 Defense Metals at lower prices. For example, an investor can purchase Defense 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 Defense Metals' 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 Defense Stock
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Defense Metals Market Sensitivity And Downside Risk
Defense Metals' beta coefficient measures the volatility of Defense 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 Defense stock's returns against your selected market. In other words, Defense Metals's beta of -0.11 provides an investor with an approximation of how much risk Defense Metals stock can potentially add to one of your existing portfolios. Defense Metals Corp is showing large volatility of returns over the selected time horizon. Defense Metals Corp is a potential penny stock. Although Defense Metals may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Defense Metals Corp. We encourage investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Defense instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.
3 Months Beta |Analyze Defense Metals Corp Demand TrendCheck current 90 days Defense Metals correlation with market (Dow Jones Industrial)Defense Beta |
Defense 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 | 7.8 |
It is essential to understand the difference between upside risk (as represented by Defense Metals's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Defense Metals' daily returns or price. Since the actual investment returns on holding a position in defense 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 Defense Metals.
Defense Metals Corp Stock Volatility Analysis
Volatility refers to the frequency at which Defense Metals stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Defense Metals' price changes. Investors will then calculate the volatility of Defense Metals' 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 Defense Metals' volatility:
Historical Volatility
This type of stock volatility measures Defense Metals' fluctuations based on previous trends. It's commonly used to predict Defense Metals' 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 Defense Metals' 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 Defense Metals' 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. Defense Metals Corp 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.
Defense Metals Projected Return Density Against Market
Assuming the 90 days trading horizon Defense Metals Corp has a beta of -0.1082 suggesting as returns on the benchmark increase, returns on holding Defense Metals are expected to decrease at a much lower rate. During a bear market, however, Defense Metals Corp is likely to outperform the market.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 Defense Metals or Metals & Mining 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 Defense Metals' 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 Defense 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.
Defense Metals Corp has an alpha of 0.9496, implying that it can generate a 0.95 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Defense Metals 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.Defense Metals Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Defense Metals is 789.86. The daily returns are distributed with a variance of 60.79 and standard deviation of 7.8. The mean deviation of Defense Metals Corp is currently at 5.97. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.79
α | Alpha over Dow Jones | 0.95 | |
β | Beta against Dow Jones | -0.11 | |
σ | Overall volatility | 7.80 | |
Ir | Information ratio | 0.12 |
Defense Metals Stock Return Volatility
Defense Metals historical daily return volatility represents how much of Defense Metals stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The venture assumes 7.7967% volatility of returns over the 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.8043% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Defense Metals Volatility
Volatility is a rate at which the price of Defense Metals 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 Defense Metals may increase or decrease. In other words, similar to Defense's beta indicator, it measures the risk of Defense Metals and helps estimate the fluctuations that may happen in a short period of time. So if prices of Defense Metals 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.| Last Reported | Projected for Next Year | ||
| Selling And Marketing Expenses | 1.5 M | 974.1 K | |
| Market Cap | 57.3 M | 60.2 M |
Defense Metals' 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 Defense Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Defense Metals' price varies over time.
3 ways to utilize Defense Metals' volatility to invest better
Higher Defense Metals' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Defense Metals Corp 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. Defense Metals Corp 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 Defense Metals Corp investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Defense Metals' 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 Defense Metals' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Defense Metals Investment Opportunity
Defense Metals Corp has a volatility of 7.8 and is 9.75 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Defense Metals Corp is higher than 69 percent of all global equities and portfolios over the last 90 days. You can use Defense Metals Corp to enhance the returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Defense Metals to be traded at C$0.175 in 90 days.Good diversification
The correlation between Defense Metals Corp and DJI is -0.01 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Defense Metals Corp and DJI in the same portfolio, assuming nothing else is changed.
Defense Metals Additional Risk Indicators
The analysis of Defense Metals' 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 Defense Metals' investment and either accepting that risk or mitigating it. Along with some common measures of Defense Metals 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 | 0.1077 | |||
| Market Risk Adjusted Performance | (8.74) | |||
| Mean Deviation | 5.81 | |||
| Semi Deviation | 5.55 | |||
| Downside Deviation | 9.07 | |||
| Coefficient Of Variation | 802.11 | |||
| Standard Deviation | 7.68 |
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.
Defense Metals 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 Defense Metals 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. Defense Metals' 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, Defense Metals' 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 Defense Metals Corp.
Additional Tools for Defense Stock Analysis
When running Defense Metals' price analysis, check to measure Defense Metals' 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 Defense Metals is operating at the current time. Most of Defense Metals' value examination focuses on studying past and present price action to predict the probability of Defense Metals' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Defense Metals' price. Additionally, you may evaluate how the addition of Defense Metals to your portfolios can decrease your overall portfolio volatility.