Nokian Renkaat (Finland) Volatility
Nokian Renkaat appears to be somewhat reliable, given 3 months investment horizon. Nokian Renkaat Oyj has Sharpe Ratio of 0.12, which conveys that the firm had a 0.12 % return per unit of risk over the last 3 months. We have found twenty-one technical indicators for Nokian Renkaat, which you can use to evaluate the volatility of the firm. Please exercise Nokian Renkaat's Risk Adjusted Performance of 0.1196, downside deviation of 2.48, and Mean Deviation of 1.55 to check out if our risk estimates are consistent with your expectations.
Nokian |
Nokian Renkaat 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 Nokian daily returns, and it is calculated using variance and standard deviation. We also use Nokian's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Nokian Renkaat volatility.
Nokian Renkaat Oyj Stock Volatility Analysis
Volatility refers to the frequency at which Nokian Renkaat stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Nokian Renkaat's price changes. Investors will then calculate the volatility of Nokian Renkaat'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 Nokian Renkaat's volatility:
Historical Volatility
This type of stock volatility measures Nokian Renkaat's fluctuations based on previous trends. It's commonly used to predict Nokian Renkaat'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 Nokian Renkaat'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 Nokian Renkaat's to be redeemed at a future date.Transformation |
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Nokian Renkaat Projected Return Density Against Market
Assuming the 90 days trading horizon Nokian Renkaat Oyj has a beta of -0.33 . This usually implies as returns on the benchmark increase, returns on holding Nokian Renkaat are expected to decrease at a much lower rate. During a bear market, however, Nokian Renkaat Oyj 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 Nokian Renkaat or Auto Components 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 Nokian Renkaat'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 Nokian 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.
Nokian Renkaat Oyj has an alpha of 0.3469, implying that it can generate a 0.35 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
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What Drives a Nokian Renkaat 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.Nokian Renkaat Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Nokian Renkaat is 823.13. The daily returns are distributed with a variance of 6.6 and standard deviation of 2.57. The mean deviation of Nokian Renkaat Oyj is currently at 1.55. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.93
α | Alpha over Dow Jones | 0.35 | |
β | Beta against Dow Jones | -0.33 | |
σ | Overall volatility | 2.57 | |
Ir | Information ratio | 0.06 |
Nokian Renkaat Stock Return Volatility
Nokian Renkaat historical daily return volatility represents how much of Nokian Renkaat stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm accepts 2.5685% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7804% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
Nokian Renkaat Investment Opportunity
Nokian Renkaat Oyj has a volatility of 2.57 and is 3.29 times more volatile than Dow Jones Industrial. 23 percent of all equities and portfolios are less risky than Nokian Renkaat. You can use Nokian Renkaat Oyj to enhance the returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Nokian Renkaat to be traded at 9.65 in 90 days.Good diversification
The correlation between Nokian Renkaat Oyj and DJI is -0.11 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Nokian Renkaat Oyj and DJI in the same portfolio, assuming nothing else is changed.
Nokian Renkaat Additional Risk Indicators
The analysis of Nokian Renkaat'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 Nokian Renkaat's investment and either accepting that risk or mitigating it. Along with some common measures of Nokian Renkaat 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 | 0.1196 | |||
| Market Risk Adjusted Performance | (0.91) | |||
| Mean Deviation | 1.55 | |||
| Semi Deviation | 2.16 | |||
| Downside Deviation | 2.48 | |||
| Coefficient Of Variation | 823.13 | |||
| Standard Deviation | 2.57 |
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.
Nokian Renkaat 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 Nokian Renkaat 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. Nokian Renkaat'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, Nokian Renkaat'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 Nokian Renkaat Oyj.
Complementary Tools for Nokian Stock analysis
When running Nokian Renkaat's price analysis, check to measure Nokian Renkaat'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 Nokian Renkaat is operating at the current time. Most of Nokian Renkaat's value examination focuses on studying past and present price action to predict the probability of Nokian Renkaat's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Nokian Renkaat's price. Additionally, you may evaluate how the addition of Nokian Renkaat to your portfolios can decrease your overall portfolio volatility.
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