Dutch Bros Stock Volatility
| BROS Stock | USD 51.91 0.71 1.39% |
Dutch Bros appears to be very steady, given 3 months investment horizon. Dutch Bros secures Sharpe Ratio (or Efficiency) of 0.21, which denotes the company had a 0.21% return per unit of risk over the last 3 months. By reviewing Dutch Bros' technical indicators, you can evaluate if the expected return of 0.89% is justified by implied risk. Please utilize Dutch Bros' Mean Deviation of 2.15, coefficient of variation of 497.18, and Downside Deviation of 1.97 to check if our risk estimates are consistent with your expectations. Key indicators related to Dutch Bros' volatility include:
90 Days Market Risk | Chance Of Distress | 90 Days Economic Sensitivity |
Dutch Bros 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 Dutch daily returns, and it is calculated using variance and standard deviation. We also use Dutch's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Dutch Bros volatility.
Dutch |
ESG Sustainability
While most ESG disclosures are voluntary, Dutch Bros' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Dutch Bros' managers and investors.Environmental | Governance | Social |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Dutch Bros 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 Dutch Bros at lower prices. For example, an investor can purchase Dutch 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 Dutch Bros' 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 together with Dutch Stock
| 0.84 | BH | Biglari Holdings | PairCorr |
| 0.69 | EVRI | Everi Holdings | PairCorr |
| 0.74 | DPZ | Dominos Pizza | PairCorr |
| 0.84 | EAT | Brinker International | PairCorr |
Moving against Dutch Stock
| 0.85 | BLMN | Bloomin Brands Buyout Trend | PairCorr |
| 0.75 | ARKR | Ark Restaurants Corp | PairCorr |
| 0.61 | IGT | International Game | PairCorr |
| 0.51 | WING | Wingstop | PairCorr |
Dutch Bros Market Sensitivity And Downside Risk
Dutch Bros' beta coefficient measures the volatility of Dutch 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 Dutch stock's returns against your selected market. In other words, Dutch Bros's beta of 0.96 provides an investor with an approximation of how much risk Dutch Bros stock can potentially add to one of your existing portfolios. Dutch Bros has relatively low volatility with skewness of 4.73 and kurtosis of 31.24. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Dutch Bros' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Dutch Bros' 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 Dutch Bros Demand TrendCheck current 90 days Dutch Bros correlation with market (Dow Jones Industrial)Dutch Beta |
Dutch 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 | 4.16 |
It is essential to understand the difference between upside risk (as represented by Dutch Bros's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Dutch Bros' daily returns or price. Since the actual investment returns on holding a position in dutch 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 Dutch Bros.
Dutch Bros Stock Volatility Analysis
Volatility refers to the frequency at which Dutch Bros stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Dutch Bros' price changes. Investors will then calculate the volatility of Dutch Bros' 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 Dutch Bros' volatility:
Historical Volatility
This type of stock volatility measures Dutch Bros' fluctuations based on previous trends. It's commonly used to predict Dutch Bros' 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 Dutch Bros' 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 Dutch Bros' 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. Dutch Bros 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.
Dutch Bros Projected Return Density Against Market
Given the investment horizon of 90 days Dutch Bros has a beta of 0.9597 suggesting Dutch Bros market returns are related to returns on the market. As the market goes up or down, Dutch Bros is expected to follow.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 Dutch Bros or Hotels, Restaurants & Leisure 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 Dutch Bros' 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 Dutch 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.
Dutch Bros has an alpha of 0.6938, implying that it can generate a 0.69 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Dutch Bros 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.Dutch Bros Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Dutch Bros is 469.22. The daily returns are distributed with a variance of 17.28 and standard deviation of 4.16. The mean deviation of Dutch Bros is currently at 2.21. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | 0.69 | |
β | Beta against Dow Jones | 0.96 | |
σ | Overall volatility | 4.16 | |
Ir | Information ratio | 0.17 |
Dutch Bros Stock Return Volatility
Dutch Bros historical daily return volatility represents how much of Dutch Bros stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 4.1571% risk (volatility on return distribution) over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7796% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Dutch Bros Volatility
Volatility is a rate at which the price of Dutch Bros 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 Dutch Bros may increase or decrease. In other words, similar to Dutch's beta indicator, it measures the risk of Dutch Bros and helps estimate the fluctuations that may happen in a short period of time. So if prices of Dutch Bros 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.3 ways to utilize Dutch Bros' volatility to invest better
Higher Dutch Bros' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Dutch Bros 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. Dutch Bros 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 Dutch Bros investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Dutch Bros' 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 Dutch Bros' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Dutch Bros Investment Opportunity
Dutch Bros has a volatility of 4.16 and is 5.33 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Dutch Bros is lower than 37 percent of all global equities and portfolios over the last 90 days. You can use Dutch Bros to enhance the returns of your portfolios. The stock experiences a large bullish trend. Check odds of Dutch Bros to be traded at $57.1 in 90 days.Average diversification
The correlation between Dutch Bros and DJI is 0.18 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Dutch Bros and DJI in the same portfolio, assuming nothing else is changed.
Dutch Bros Additional Risk Indicators
The analysis of Dutch Bros' 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 Dutch Bros' investment and either accepting that risk or mitigating it. Along with some common measures of Dutch Bros 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 | 0.1624 | |||
| Market Risk Adjusted Performance | 0.8537 | |||
| Mean Deviation | 2.15 | |||
| Semi Deviation | 1.35 | |||
| Downside Deviation | 1.97 | |||
| Coefficient Of Variation | 497.18 | |||
| Standard Deviation | 4.08 |
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.
Dutch Bros 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 Dutch Bros 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. Dutch Bros' 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, Dutch Bros' 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 Dutch Bros.
Additional Tools for Dutch Stock Analysis
When running Dutch Bros' price analysis, check to measure Dutch Bros' 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 Dutch Bros is operating at the current time. Most of Dutch Bros' value examination focuses on studying past and present price action to predict the probability of Dutch Bros' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Dutch Bros' price. Additionally, you may evaluate how the addition of Dutch Bros to your portfolios can decrease your overall portfolio volatility.