Western Alliance Bancorporation Stock Volatility
| WAL Stock | USD 93.65 2.37 2.60% |
Western Alliance appears to be very steady, given 3 months investment horizon. Western Alliance Ban shows Sharpe Ratio of 0.0988, which attests that the company had a 0.0988% return per unit of risk over the last 3 months. We have found thirty technical indicators for Western Alliance Ban, which you can use to evaluate the volatility of the company. Please utilize Western Alliance's Mean Deviation of 1.95, market risk adjusted performance of 0.1348, and Downside Deviation of 2.43 to validate if our risk estimates are consistent with your expectations. Key indicators related to Western Alliance's volatility include:
360 Days Market Risk | Chance Of Distress | 360 Days Economic Sensitivity |
Western Alliance 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 Western daily returns, and it is calculated using variance and standard deviation. We also use Western's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Western Alliance volatility.
Western |
ESG Sustainability
While most ESG disclosures are voluntary, Western Alliance's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Western Alliance's managers and investors.Environmental | Governance | Social |
Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Western Alliance at lower prices. For example, an investor can purchase Western stock that has halved in price over a short period. This will lower their average cost per share, thereby improving the overall portfolio performance when market normalizes.
Moving together with Western Stock
| 0.7 | AX | Axos Financial | PairCorr |
| 0.68 | BY | Byline Bancorp Fiscal Year End 23rd of January 2025 | PairCorr |
| 0.76 | PB | Prosperity Bancshares Fiscal Year End 22nd of January 2025 | PairCorr |
| 0.82 | RF | Regions Financial Fiscal Year End 17th of January 2025 | PairCorr |
| 0.64 | VABK | Virginia National | PairCorr |
| 0.77 | VBNK | VersaBank Fiscal Year End 11th of December 2024 | PairCorr |
Western Alliance Market Sensitivity And Downside Risk
Western Alliance's beta coefficient measures the volatility of Western 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 Western stock's returns against your selected market. In other words, Western Alliance's beta of 2.62 provides an investor with an approximation of how much risk Western Alliance stock can potentially add to one of your existing portfolios. Western Alliance Bancorporation currently demonstrates below-average downside deviation. It has Information Ratio of 0.07 and Jensen Alpha of 0.01. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Western Alliance's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Western Alliance's 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 Western Alliance Ban Demand TrendCheck current 90 days Western Alliance correlation with market (Dow Jones Industrial)Western Beta |
Western 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 | 2.88 |
It is essential to understand the difference between upside risk (as represented by Western Alliance's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Western Alliance's daily returns or price. Since the actual investment returns on holding a position in western 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 Western Alliance.
Western Alliance Ban Stock Volatility Analysis
Volatility refers to the frequency at which Western Alliance stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Western Alliance's price changes. Investors will then calculate the volatility of Western Alliance'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 Western Alliance's volatility:
Historical Volatility
This type of stock volatility measures Western Alliance's fluctuations based on previous trends. It's commonly used to predict Western Alliance'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 Western Alliance'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 Western Alliance'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. Western Alliance Ban 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.
Western Alliance Projected Return Density Against Market
Considering the 90-day investment horizon the stock has the beta coefficient of 2.6165 . This entails as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Western Alliance will likely underperform.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 Western Alliance or Banks 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 Western Alliance'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 Western 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.
Western Alliance Bancorporation has an alpha of 0.0105, implying that it can generate a 0.0105 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Western Alliance 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.Western Alliance Stock Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Western Alliance is 1012.42. The daily returns are distributed with a variance of 8.3 and standard deviation of 2.88. The mean deviation of Western Alliance Bancorporation is currently at 1.88. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | 0.01 | |
β | Beta against Dow Jones | 2.62 | |
σ | Overall volatility | 2.88 | |
Ir | Information ratio | 0.07 |
Western Alliance Stock Return Volatility
Western Alliance historical daily return volatility represents how much of Western Alliance stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company has volatility of 2.8802% on return distribution over 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7685% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Western Alliance Volatility
Volatility is a rate at which the price of Western Alliance 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 Western Alliance may increase or decrease. In other words, similar to Western's beta indicator, it measures the risk of Western Alliance and helps estimate the fluctuations that may happen in a short period of time. So if prices of Western Alliance 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 | 21.8 M | 22.9 M | |
| Market Cap | 6.4 B | 6.7 B |
Western Alliance'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 Western Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Western Alliance's price varies over time.
3 ways to utilize Western Alliance's volatility to invest better
Higher Western Alliance's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Western Alliance Ban 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. Western Alliance Ban 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 Western Alliance Ban investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Western Alliance'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 Western Alliance's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Western Alliance Investment Opportunity
Western Alliance Bancorporation has a volatility of 2.88 and is 3.74 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Western Alliance Bancorporation is lower than 25 percent of all global equities and portfolios over the last 90 days. You can use Western Alliance Bancorporation to enhance the returns of your portfolios. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Western Alliance to be traded at $112.38 in 90 days.Poor diversification
The correlation between Western Alliance Bancorp. and DJI is 0.68 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. and DJI in the same portfolio, assuming nothing else is changed.
Western Alliance Additional Risk Indicators
The analysis of Western Alliance'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 Western Alliance's investment and either accepting that risk or mitigating it. Along with some common measures of Western Alliance 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 | 0.0954 | |||
| Market Risk Adjusted Performance | 0.1348 | |||
| Mean Deviation | 1.95 | |||
| Semi Deviation | 2.13 | |||
| Downside Deviation | 2.43 | |||
| Coefficient Of Variation | 871.52 | |||
| Standard Deviation | 2.93 |
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.
Western Alliance 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 Western Alliance 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. Western Alliance'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, Western Alliance'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 Western Alliance Bancorporation.
When determining whether Western Alliance Ban is a strong investment it is important to analyze Western Alliance's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Western Alliance's future performance. For an informed investment choice regarding Western Stock, refer to the following important reports: Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Western Alliance Bancorporation. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in nation. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Is Regional Banks space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Western Alliance. If investors know Western will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Western Alliance listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.09) | Dividend Share 1.48 | Earnings Share 6.47 | Revenue Per Share 26.821 | Quarterly Revenue Growth 0.121 |
The market value of Western Alliance Ban is measured differently than its book value, which is the value of Western that is recorded on the company's balance sheet. Investors also form their own opinion of Western Alliance's value that differs from its market value or its book value, called intrinsic value, which is Western Alliance's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Western Alliance's market value can be influenced by many factors that don't directly affect Western Alliance's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Western Alliance's value and its price as these two are different measures arrived at by different means. Investors typically determine if Western Alliance is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Western Alliance's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.