GEA GROUP (Germany) Volatility

G1A Stock  EUR 56.10  0.40  0.71%   
GEA GROUP appears to be very steady, given 3 months investment horizon. GEA GROUP retains Efficiency (Sharpe Ratio) of 0.19, which attests that the entity had a 0.19 % return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for GEA GROUP, which you can use to evaluate the volatility of the firm. Please utilize GEA GROUP's Market Risk Adjusted Performance of 1.21, semi deviation of 0.9452, and Coefficient Of Variation of 513.07 to validate if our risk estimates are consistent with your expectations. Key indicators related to GEA GROUP's volatility include:
90 Days Market Risk
Chance Of Distress
90 Days Economic Sensitivity
GEA GROUP 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 GEA daily returns, and it is calculated using variance and standard deviation. We also use GEA's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of GEA GROUP volatility.
  
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as GEA GROUP 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 GEA GROUP at lower prices to lower their average cost per share. Similarly, when the prices of GEA GROUP's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.

Moving together with GEA Stock

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Moving against GEA Stock

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  0.36HHX HAMMONIA SchiffsholdingPairCorr

GEA GROUP Market Sensitivity And Downside Risk

GEA GROUP's beta coefficient measures the volatility of GEA 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 GEA stock's returns against your selected market. In other words, GEA GROUP's beta of 0.19 provides an investor with an approximation of how much risk GEA GROUP stock can potentially add to one of your existing portfolios. GEA GROUP has relatively low volatility with skewness of 0.04 and kurtosis of -0.74. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure GEA GROUP'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 GEA GROUP'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 GEA GROUP Demand Trend
Check current 90 days GEA GROUP correlation with market (Dow Jones Industrial)

GEA Beta

    
  0.19  
GEA 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

    
  1.26  
It is essential to understand the difference between upside risk (as represented by GEA GROUP's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of GEA GROUP's daily returns or price. Since the actual investment returns on holding a position in gea 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 GEA GROUP.

GEA GROUP Stock Volatility Analysis

Volatility refers to the frequency at which GEA GROUP stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with GEA GROUP's price changes. Investors will then calculate the volatility of GEA GROUP'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 GEA GROUP's volatility:

Historical Volatility

This type of stock volatility measures GEA GROUP's fluctuations based on previous trends. It's commonly used to predict GEA GROUP'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 GEA GROUP'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 GEA GROUP'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. GEA GROUP 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.

GEA GROUP Projected Return Density Against Market

Assuming the 90 days horizon GEA GROUP has a beta of 0.1927 . This usually indicates as returns on the market go up, GEA GROUP average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding GEA GROUP 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 GEA GROUP or Industrials 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 GEA GROUP'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 GEA 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.
GEA GROUP has an alpha of 0.2526, implying that it can generate a 0.25 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
GEA GROUP's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how gea stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a GEA GROUP 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.

GEA GROUP Stock Risk Measures

Assuming the 90 days horizon the coefficient of variation of GEA GROUP is 523.73. The daily returns are distributed with a variance of 1.58 and standard deviation of 1.26. The mean deviation of GEA GROUP is currently at 1.04. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.87
α
Alpha over Dow Jones
0.25
β
Beta against Dow Jones0.19
σ
Overall volatility
1.26
Ir
Information ratio 0.27

GEA GROUP Stock Return Volatility

GEA GROUP historical daily return volatility represents how much of GEA GROUP stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company shows 1.2552% volatility of returns over 90 . By contrast, Dow Jones Industrial accepts 0.9084% volatility on return distribution over the 90 days horizon.
 Performance 
       Timeline  

About GEA GROUP Volatility

Volatility is a rate at which the price of GEA GROUP 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 GEA GROUP may increase or decrease. In other words, similar to GEA's beta indicator, it measures the risk of GEA GROUP and helps estimate the fluctuations that may happen in a short period of time. So if prices of GEA GROUP 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.
GEA Group Aktiengesellschaft engages in the development and production of systems and components for the food processing industry worldwide. GEA Group Aktiengesellschaft was founded in 1881 and is headquartered in Dsseldorf, Germany. GEA GROUP operates under Specialty Industrial Machinery classification in Germany and is traded on Frankfurt Stock Exchange. It employs 18070 people.
GEA GROUP'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 GEA Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much GEA GROUP's price varies over time.

3 ways to utilize GEA GROUP's volatility to invest better

Higher GEA GROUP's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of GEA GROUP 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. GEA GROUP 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 GEA GROUP investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in GEA GROUP'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 GEA GROUP's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.

GEA GROUP Investment Opportunity

GEA GROUP has a volatility of 1.26 and is 1.38 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of GEA GROUP is lower than 11 percent of all global equities and portfolios over the last 90 days. You can use GEA GROUP to protect your portfolios against small market fluctuations. The stock experiences a moderate downward daily trend and can be a good diversifier. Check odds of GEA GROUP to be traded at €54.98 in 90 days.

Average diversification

The correlation between GEA GROUP and DJI is 0.14 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding GEA GROUP and DJI in the same portfolio, assuming nothing else is changed.

GEA GROUP Additional Risk Indicators

The analysis of GEA GROUP'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 GEA GROUP's investment and either accepting that risk or mitigating it. Along with some common measures of GEA GROUP 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.
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.

GEA GROUP 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 GEA GROUP 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. GEA GROUP'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, GEA GROUP'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 GEA GROUP.

Complementary Tools for GEA Stock analysis

When running GEA GROUP's price analysis, check to measure GEA GROUP'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 GEA GROUP is operating at the current time. Most of GEA GROUP's value examination focuses on studying past and present price action to predict the probability of GEA GROUP's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move GEA GROUP's price. Additionally, you may evaluate how the addition of GEA GROUP to your portfolios can decrease your overall portfolio volatility.
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