Optex Systems Holdings, Stock Volatility
| OPXS Stock | USD 8.90 0.07 0.78% |
Optex Systems appears to be slightly risky, given 3 months investment horizon. Optex Systems Holdings, maintains Sharpe Ratio (i.e., Efficiency) of 0.0761, which implies the firm had a 0.0761% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Optex Systems Holdings,, which you can use to evaluate the volatility of the company. Please evaluate Optex Systems' Risk Adjusted Performance of 0.0523, semi deviation of 3.86, and Coefficient Of Variation of 1726.35 to confirm if our risk estimates are consistent with your expectations. Key indicators related to Optex Systems' volatility include:
90 Days Market Risk | Chance Of Distress | 90 Days Economic Sensitivity |
Optex Systems 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 Optex daily returns, and it is calculated using variance and standard deviation. We also use Optex's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Optex Systems volatility.
Optex |
ESG Sustainability
While most ESG disclosures are voluntary, Optex Systems' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Optex Systems' managers and investors.Environmental | Governance | Social |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Optex Systems 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 Optex Systems at lower prices. For example, an investor can purchase Optex 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 Optex Systems' 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 Optex Stock
Optex Systems Market Sensitivity And Downside Risk
Optex Systems' beta coefficient measures the volatility of Optex 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 Optex stock's returns against your selected market. In other words, Optex Systems's beta of -0.0651 provides an investor with an approximation of how much risk Optex Systems stock can potentially add to one of your existing portfolios. Optex Systems Holdings, shows above-average downside volatility for the selected time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Optex Systems' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Optex Systems' 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 Optex Systems Holdings, Demand TrendCheck current 90 days Optex Systems correlation with market (Dow Jones Industrial)Optex Beta |
Optex 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 | 3.86 |
It is essential to understand the difference between upside risk (as represented by Optex Systems's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Optex Systems' daily returns or price. Since the actual investment returns on holding a position in optex 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 Optex Systems.
Optex Systems Holdings, Stock Volatility Analysis
Volatility refers to the frequency at which Optex Systems stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Optex Systems' price changes. Investors will then calculate the volatility of Optex Systems' 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 Optex Systems' volatility:
Historical Volatility
This type of stock volatility measures Optex Systems' fluctuations based on previous trends. It's commonly used to predict Optex Systems' 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 Optex Systems' 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 Optex Systems' 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. Optex Systems 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.
Optex Systems Projected Return Density Against Market
Given the investment horizon of 90 days Optex Systems Holdings, has a beta of -0.0651 . This indicates as returns on the benchmark increase, returns on holding Optex Systems are expected to decrease at a much lower rate. During a bear market, however, Optex Systems Holdings, 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 Optex Systems or Aerospace & Defense 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 Optex Systems' 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 Optex 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.
Optex Systems Holdings, has an alpha of 0.2181, implying that it can generate a 0.22 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives an Optex Systems 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.Optex Systems Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Optex Systems is 1313.87. The daily returns are distributed with a variance of 14.88 and standard deviation of 3.86. The mean deviation of Optex Systems Holdings, is currently at 2.57. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.76
α | Alpha over Dow Jones | 0.22 | |
β | Beta against Dow Jones | -0.07 | |
σ | Overall volatility | 3.86 | |
Ir | Information ratio | 0.02 |
Optex Systems Stock Return Volatility
Optex Systems historical daily return volatility represents how much of Optex Systems stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 3.8576% risk (volatility on return distribution) over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7502% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Optex Systems Volatility
Volatility is a rate at which the price of Optex Systems 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 Optex Systems may increase or decrease. In other words, similar to Optex's beta indicator, it measures the risk of Optex Systems and helps estimate the fluctuations that may happen in a short period of time. So if prices of Optex Systems 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 | 3.7 B | 3.9 B | |
| Market Cap | 10.1 M | 8.8 M |
Optex Systems' 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 Optex Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Optex Systems' price varies over time.
3 ways to utilize Optex Systems' volatility to invest better
Higher Optex Systems' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Optex Systems 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. Optex Systems 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 Optex Systems Holdings, investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Optex Systems' 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 Optex Systems' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Optex Systems Investment Opportunity
Optex Systems Holdings, has a volatility of 3.86 and is 5.15 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Optex Systems Holdings, is lower than 34 percent of all global equities and portfolios over the last 90 days. You can use Optex Systems Holdings, 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 Optex Systems to be traded at $8.72 in 90 days.Good diversification
The correlation between Optex Systems Holdings, 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 Optex Systems Holdings, and DJI in the same portfolio, assuming nothing else is changed.
Optex Systems Additional Risk Indicators
The analysis of Optex Systems' 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 Optex Systems' investment and either accepting that risk or mitigating it. Along with some common measures of Optex Systems 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 | 0.0523 | |||
| Market Risk Adjusted Performance | (3.21) | |||
| Mean Deviation | 2.54 | |||
| Semi Deviation | 3.86 | |||
| Downside Deviation | 4.1 | |||
| Coefficient Of Variation | 1726.35 | |||
| Standard Deviation | 3.79 |
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.
Optex Systems 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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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 Optex Systems 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. Optex Systems' 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, Optex Systems' 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 Optex Systems Holdings,.
Additional Tools for Optex Stock Analysis
When running Optex Systems' price analysis, check to measure Optex Systems' 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 Optex Systems is operating at the current time. Most of Optex Systems' value examination focuses on studying past and present price action to predict the probability of Optex Systems' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Optex Systems' price. Additionally, you may evaluate how the addition of Optex Systems to your portfolios can decrease your overall portfolio volatility.