PSI 20 (Portugal) Volatility
| PSI20 Index | 6,798 63.41 0.92% |
PSI 20 Stock maintains Sharpe Ratio (i.e., Efficiency) of 0.15, which implies the entity had a 0.15 % return per unit of volatility over the last 3 months. We have found twenty-six technical indicators for PSI 20 Stock, which you can use to evaluate the volatility of the index.
PSI 20 Index 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 PSI daily returns, and it is calculated using variance and standard deviation. We also use PSI's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of PSI 20 volatility.
PSI 20 Stock Index Volatility Analysis
Volatility refers to the frequency at which PSI 20 index price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with PSI 20's price changes. Investors will then calculate the volatility of PSI 20's index to predict their future moves. A index that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A index with relatively stable price changes has low volatility. A highly volatile index 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 PSI 20's volatility:
Historical Volatility
This type of index volatility measures PSI 20's fluctuations based on previous trends. It's commonly used to predict PSI 20's future behavior based on its past. However, it cannot conclusively determine the future direction of the index.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for PSI 20's current market price. This means that the index will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on PSI 20'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. PSI 20 Stock 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.
PSI 20 Projected Return Density Against Market
Predicted Return Density |
| Returns |
What Drives a PSI 20 Price Volatility?
Several factors can influence a index'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.PSI 20 Investment Opportunity
Dow Jones Industrial has a standard deviation of returns of 0.84 and is 1.06 times more volatile than PSI 20 Stock. 7 percent of all equities and portfolios are less risky than PSI 20. You can use PSI 20 Stock to protect your portfolios against small market fluctuations. The index experiences a moderate downward daily trend and can be a good diversifier. Check odds of PSI 20 to be traded at 6661.6 in 90 days.PSI 20 Additional Risk Indicators
The analysis of PSI 20'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 PSI 20's investment and either accepting that risk or mitigating it. Along with some common measures of PSI 20 index'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 | 0.1298 | |||
| Mean Deviation | 0.6122 | |||
| Semi Deviation | 0.6495 | |||
| Downside Deviation | 0.7737 | |||
| Coefficient Of Variation | 675.86 | |||
| Standard Deviation | 0.7792 | |||
| Variance | 0.6071 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential indexs, we recommend comparing similar indexs with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
PSI 20 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 PSI 20 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. PSI 20'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, PSI 20'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 PSI 20 Stock.