Optical Cable Stock Volatility
| OCC Stock | USD 4.04 0.05 1.22% |
Optical Cable is dangerous given 3 months investment horizon. Optical Cable maintains Sharpe Ratio (i.e., Efficiency) of 0.14, which implies the firm had a 0.14 % return per unit of risk over the last 3 months. We were able to break down twenty-nine different technical indicators, which can help you to evaluate if expected returns of 1.46% are justified by taking the suggested risk. Use Optical Cable Semi Deviation of 4.05, coefficient of variation of 693.4, and Risk Adjusted Performance of 0.1155 to evaluate company specific risk that cannot be diversified away. Key indicators related to Optical Cable's volatility include:
720 Days Market Risk | Chance Of Distress | 720 Days Economic Sensitivity |
Optical Cable 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 Optical daily returns, and it is calculated using variance and standard deviation. We also use Optical's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Optical Cable volatility.
Optical |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Optical Cable 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 Optical Cable at lower prices to lower their average cost per share. Similarly, when the prices of Optical Cable's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Moving against Optical Stock
| 0.47 | DIS | Walt Disney | PairCorr |
| 0.46 | AA | Alcoa Corp | PairCorr |
| 0.46 | PG | Procter Gamble | PairCorr |
| 0.43 | MSFT | Microsoft | PairCorr |
| 0.43 | DD | Dupont De Nemours | PairCorr |
| 0.41 | HPQ | HP Inc | PairCorr |
| 0.36 | MRK | Merck Company Aggressive Push | PairCorr |
| 0.34 | TRV | The Travelers Companies | PairCorr |
| 0.32 | PKX | POSCO Holdings | PairCorr |
Optical Cable Market Sensitivity And Downside Risk
Optical Cable's beta coefficient measures the volatility of Optical 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 Optical stock's returns against your selected market. In other words, Optical Cable's beta of 1.97 provides an investor with an approximation of how much risk Optical Cable stock can potentially add to one of your existing portfolios. Optical Cable 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 Optical Cable'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 Optical Cable'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 Optical Cable Demand TrendCheck current 90 days Optical Cable correlation with market (Dow Jones Industrial)Optical Beta |
Optical 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 | 10.15 |
It is essential to understand the difference between upside risk (as represented by Optical Cable's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Optical Cable's daily returns or price. Since the actual investment returns on holding a position in optical 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 Optical Cable.
Optical Cable Stock Volatility Analysis
Volatility refers to the frequency at which Optical Cable stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Optical Cable's price changes. Investors will then calculate the volatility of Optical Cable'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 Optical Cable's volatility:
Historical Volatility
This type of stock volatility measures Optical Cable's fluctuations based on previous trends. It's commonly used to predict Optical Cable'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 Optical Cable'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 Optical Cable'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. Optical Cable 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.
Optical Cable Projected Return Density Against Market
Considering the 90-day investment horizon the stock has the beta coefficient of 1.9666 . This indicates as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Optical Cable will likely underperform.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 Optical Cable or Communications Equipment 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 Optical Cable'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 Optical 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.
Optical Cable has an alpha of 1.4997, implying that it can generate a 1.5 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives an Optical Cable 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.Optical Cable Stock Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Optical Cable is 693.4. The daily returns are distributed with a variance of 103.12 and standard deviation of 10.15. The mean deviation of Optical Cable is currently at 5.67. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.74
α | Alpha over Dow Jones | 1.50 | |
β | Beta against Dow Jones | 1.97 | |
σ | Overall volatility | 10.15 | |
Ir | Information ratio | 0.15 |
Optical Cable Stock Return Volatility
Optical Cable historical daily return volatility represents how much of Optical Cable stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 10.1547% on return distribution over 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7503% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Optical Cable Volatility
Volatility is a rate at which the price of Optical Cable 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 Optical Cable may increase or decrease. In other words, similar to Optical's beta indicator, it measures the risk of Optical Cable and helps estimate the fluctuations that may happen in a short period of time. So if prices of Optical Cable 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.Optical Cable Corporation, together with its subsidiaries, manufactures and sells fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally. Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia. Optical Cable operates under Communication Equipment classification in the United States and is traded on NASDAQ Exchange. It employs 322 people.
Optical Cable'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 Optical Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Optical Cable's price varies over time.
3 ways to utilize Optical Cable's volatility to invest better
Higher Optical Cable's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Optical Cable 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. Optical Cable 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 Optical Cable investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Optical Cable'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 Optical Cable's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Optical Cable Investment Opportunity
Optical Cable has a volatility of 10.15 and is 13.53 times more volatile than Dow Jones Industrial. 90 percent of all equities and portfolios are less risky than Optical Cable. You can use Optical Cable to protect your portfolios against small market fluctuations. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of Optical Cable to be traded at $3.92 in 90 days.Average diversification
The correlation between Optical Cable 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 Optical Cable and DJI in the same portfolio, assuming nothing else is changed.
Optical Cable Additional Risk Indicators
The analysis of Optical Cable'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 Optical Cable's investment and either accepting that risk or mitigating it. Along with some common measures of Optical Cable 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 | 0.1155 | |||
| Market Risk Adjusted Performance | 0.7496 | |||
| Mean Deviation | 5.67 | |||
| Semi Deviation | 4.05 | |||
| Downside Deviation | 5.16 | |||
| Coefficient Of Variation | 693.4 | |||
| Standard Deviation | 10.15 |
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.
Optical Cable 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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| NVIDIA vs. Optical Cable |
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 Optical Cable 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. Optical Cable'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, Optical Cable'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 Optical Cable.
Complementary Tools for Optical Stock analysis
When running Optical Cable's price analysis, check to measure Optical Cable'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 Optical Cable is operating at the current time. Most of Optical Cable's value examination focuses on studying past and present price action to predict the probability of Optical Cable's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Optical Cable's price. Additionally, you may evaluate how the addition of Optical Cable to your portfolios can decrease your overall portfolio volatility.
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