SMU SA (Chile) Volatility
As of now, SMU Stock is very steady. SMU SA owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.0253, which indicates the firm had a 0.0253% return per unit of standard deviation over the last 3 months. We have found twenty-one technical indicators for SMU SA, which you can use to evaluate the volatility of the company. Please validate SMU SA's coefficient of variation of 3950.55, and Risk Adjusted Performance of 0.0218 to confirm if the risk estimate we provide is consistent with the expected return of 0.0256%.
SMU |
SMU SA 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 SMU daily returns, and it is calculated using variance and standard deviation. We also use SMU's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of SMU SA volatility.
SMU SA Stock Volatility Analysis
Volatility refers to the frequency at which SMU SA stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with SMU SA's price changes. Investors will then calculate the volatility of SMU SA'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 SMU SA's volatility:
Historical Volatility
This type of stock volatility measures SMU SA's fluctuations based on previous trends. It's commonly used to predict SMU SA'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 SMU SA'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 SMU SA's to be redeemed at a future date.Transformation |
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SMU SA Projected Return Density Against Market
Assuming the 90 days trading horizon SMU SA has a beta of -0.2141 . This usually implies as returns on the benchmark increase, returns on holding SMU SA are expected to decrease at a much lower rate. During a bear market, however, SMU SA 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 SMU SA or Consumer Cyclical 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 SMU SA'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 SMU 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.
SMU SA has an alpha of 0.0415, implying that it can generate a 0.0415 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a SMU SA 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.SMU SA Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of SMU SA is 3950.55. The daily returns are distributed with a variance of 1.03 and standard deviation of 1.01. The mean deviation of SMU SA is currently at 0.81. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | 0.04 | |
β | Beta against Dow Jones | -0.21 | |
σ | Overall volatility | 1.01 | |
Ir | Information ratio | -0.1 |
SMU SA Stock Return Volatility
SMU SA historical daily return volatility represents how much of SMU SA stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm assumes 1.013% volatility of returns over the 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7626% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About SMU SA Volatility
Volatility is a rate at which the price of SMU SA 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 SMU SA may increase or decrease. In other words, similar to SMU's beta indicator, it measures the risk of SMU SA and helps estimate the fluctuations that may happen in a short period of time. So if prices of SMU SA 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.The company offers fresh items, such as fruits and vegetables, white and red meats, and dairy products, as well as dry goods, wine and spirits, frozen and cleaning products, and various non-food items and ready meals, chocolates, beverages, pastries, bread, and tobacco products. SMU S.A. was founded in 2007 and is based in Las Condes, Chile. SMU SA is traded on Commodity Exchange in Exotistan.
SMU SA'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 SMU Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much SMU SA's price varies over time.
3 ways to utilize SMU SA's volatility to invest better
Higher SMU SA's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of SMU SA 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. SMU SA 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 SMU SA investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in SMU SA'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 SMU SA's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
SMU SA Investment Opportunity
SMU SA has a volatility of 1.01 and is 1.33 times more volatile than Dow Jones Industrial. 9 percent of all equities and portfolios are less risky than SMU SA. You can use SMU SA to enhance the returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of SMU SA to be traded at 167.2 in 90 days.Good diversification
The correlation between SMU SA and DJI is -0.15 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding SMU SA and DJI in the same portfolio, assuming nothing else is changed.
SMU SA Additional Risk Indicators
The analysis of SMU SA'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 SMU SA's investment and either accepting that risk or mitigating it. Along with some common measures of SMU SA 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 | 0.0218 | |||
| Market Risk Adjusted Performance | (0.06) | |||
| Mean Deviation | 0.8099 | |||
| Semi Deviation | 0.9334 | |||
| Downside Deviation | 0.9785 | |||
| Coefficient Of Variation | 3950.55 | |||
| Standard Deviation | 1.01 |
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.
SMU SA 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 SMU SA 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. SMU SA'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, SMU SA'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 SMU SA.
Other Information on Investing in SMU Stock
SMU SA financial ratios help investors to determine whether SMU Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in SMU with respect to the benefits of owning SMU SA security.