Technology Select Sector Etf Volatility
| XLK Etf | USD 233.48 2.35 1.02% |
As of now, Technology Etf is very steady. Technology Select Sector owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.0703, which indicates the etf had a 0.0703% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Technology Select Sector, which you can use to evaluate the volatility of the etf. Please validate Technology Select's Risk Adjusted Performance of 0.0356, coefficient of variation of 2435.25, and Semi Deviation of 1.54 to confirm if the risk estimate we provide is consistent with the expected return of 0.0988%. Key indicators related to Technology Select's volatility include:
180 Days Market Risk | Chance Of Distress | 180 Days Economic Sensitivity |
Technology Select Etf 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 Technology daily returns, and it is calculated using variance and standard deviation. We also use Technology's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Technology Select volatility.
Technology |
Downward market volatility can be a perfect environment for investors who play the long game with Technology Select. They may decide to buy additional shares of Technology Select at lower prices to lower the average cost per share, thereby improving their portfolio's performance when markets normalize.
Moving together with Technology Etf
| 0.99 | VGT | Vanguard Information | PairCorr |
| 0.99 | IYW | iShares Technology ETF | PairCorr |
| 0.92 | SMH | VanEck Semiconductor ETF | PairCorr |
| 0.94 | CIBR | First Trust NASDAQ | PairCorr |
| 0.99 | FTEC | Fidelity MSCI Information | PairCorr |
| 0.81 | IGV | iShares Expanded Tech | PairCorr |
| 0.87 | FDN | First Trust Dow | PairCorr |
Technology Select Market Sensitivity And Downside Risk
Technology Select's beta coefficient measures the volatility of Technology etf 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 Technology etf's returns against your selected market. In other words, Technology Select's beta of 1.19 provides an investor with an approximation of how much risk Technology Select etf can potentially add to one of your existing portfolios. Technology Select Sector has relatively low volatility with skewness of -0.59 and kurtosis of 1.4. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Technology Select's etf risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Technology Select's etf 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 Technology Select Sector Demand TrendCheck current 90 days Technology Select correlation with market (Dow Jones Industrial)Technology Beta |
Technology 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 | 1.41 |
It is essential to understand the difference between upside risk (as represented by Technology Select's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Technology Select's daily returns or price. Since the actual investment returns on holding a position in technology etf 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 Technology Select.
Technology Select Sector Etf Volatility Analysis
Volatility refers to the frequency at which Technology Select etf price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Technology Select's price changes. Investors will then calculate the volatility of Technology Select's etf to predict their future moves. A etf that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A etf with relatively stable price changes has low volatility. A highly volatile etf 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 Technology Select's volatility:
Historical Volatility
This type of etf volatility measures Technology Select's fluctuations based on previous trends. It's commonly used to predict Technology Select's future behavior based on its past. However, it cannot conclusively determine the future direction of the etf.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Technology Select's current market price. This means that the etf will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Technology Select'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. Technology Select Sector 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.
Technology Select Projected Return Density Against Market
Considering the 90-day investment horizon the etf has the beta coefficient of 1.1882 . 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, Technology Select 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 Technology Select or SPDR State Street Global Advisors 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 Technology Select's price will be affected by overall etf 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 Technology etf'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.
Technology Select Sector has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the Dow Jones Industrial. Predicted Return Density |
| Returns |
What Drives a Technology Select Price Volatility?
Several factors can influence a etf'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.Technology Select Etf Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Technology Select is 1423.08. The daily returns are distributed with a variance of 1.98 and standard deviation of 1.41. The mean deviation of Technology Select Sector is currently at 1.0. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.75
α | Alpha over Dow Jones | -0.05 | |
β | Beta against Dow Jones | 1.19 | |
σ | Overall volatility | 1.41 | |
Ir | Information ratio | -0.03 |
Technology Select Etf Return Volatility
Technology Select historical daily return volatility represents how much of Technology Select etf's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The ETF venture has volatility of 1.4062% on return distribution over 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7668% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Technology Select Volatility
Volatility is a rate at which the price of Technology Select 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 Technology Select may increase or decrease. In other words, similar to Technology's beta indicator, it measures the risk of Technology Select and helps estimate the fluctuations that may happen in a short period of time. So if prices of Technology Select 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.In seeking to track the performance of the index, the fund employs a replication strategy, which means that the fund typically invests in substantially all of the securities represented in the index in approximately the same proportions as the index. SP 500 is traded on NYSEARCA Exchange in the United States.
Technology Select'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 Technology Etf over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Technology Select's price varies over time.
3 ways to utilize Technology Select's volatility to invest better
Higher Technology Select's etf volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Technology Select Sector etf 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. Technology Select Sector etf 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 Technology Select Sector investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Technology Select's etf 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 Technology Select's etf relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Technology Select Investment Opportunity
Technology Select Sector has a volatility of 1.41 and is 1.83 times more volatile than Dow Jones Industrial. 12 percent of all equities and portfolios are less risky than Technology Select. You can use Technology Select Sector to enhance the returns of your portfolios. The etf experiences a large bullish trend. Check odds of Technology Select to be traded at $256.83 in 90 days.Poor diversification
The correlation between Technology Select Sector and DJI is 0.63 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Technology Select Sector and DJI in the same portfolio, assuming nothing else is changed.
Technology Select Additional Risk Indicators
The analysis of Technology Select'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 Technology Select's investment and either accepting that risk or mitigating it. Along with some common measures of Technology Select etf'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 | 0.0356 | |||
| Market Risk Adjusted Performance | 0.0508 | |||
| Mean Deviation | 1.03 | |||
| Semi Deviation | 1.54 | |||
| Downside Deviation | 1.58 | |||
| Coefficient Of Variation | 2435.25 | |||
| Standard Deviation | 1.42 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential etfs, we recommend comparing similar etfs with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Technology Select 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 Technology Select 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. Technology Select'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, Technology Select'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 Technology Select Sector.
When determining whether Technology Select Sector is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Technology Etf is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Technology Select Sector Etf. Highlighted below are key reports to facilitate an investment decision about Technology Select Sector Etf: Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Technology Select Sector. Also, note that the market value of any etf could be closely tied with the direction of predictive economic indicators such as signals in bureau of economic analysis. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
The market value of Technology Select Sector is measured differently than its book value, which is the value of Technology that is recorded on the company's balance sheet. Investors also form their own opinion of Technology Select's value that differs from its market value or its book value, called intrinsic value, which is Technology Select'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 Technology Select's market value can be influenced by many factors that don't directly affect Technology Select'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 Technology Select's value and its price as these two are different measures arrived at by different means. Investors typically determine if Technology Select is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Technology Select'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.