What is the beta of a stock when the market moves up?
If a stock moves down 10% when the market moves up 10%, it has a beta of -1.00. If a stock moves down 5% when the market moves up 10%, it has a beta of -.50. If a stock moves down 20% when the market moves up 10%, it has a beta of -2.00.
What does it mean when a stock moves up or down?
A stock moving up or down on low volume is usually a warning sign: proceed with caution. It may mean a move you cannot trust: market uncertainty, manipulation or a thinly traded, volatile stock that is generally riskier to trade than high-volume stocks.
How much will a stock rise if the market declines?
That means this stock could rise by 20%. On the other hand, if the market declines 6%, investors in that company can expect a loss of 12%. If a stock had a beta of 0.5, we would expect it to be half as volatile as the market: A market return of 10% would mean a 5% gain for the company.
What happens when a stock goes up 100 percent?
The first stock went up by (10 -5) / 5 * 100 = 100 percent, while the second stock increased by (18 - 10) / 10 * 100 = 80 percent. If a stock goes up 100 percent, it's doubled in value. That's also reflected in the relative increase in your two investments.
What is it called when a stock goes up and down?
The Stock Cycle: What Goes up Must Come Down.
What is a good alpha for a stock?
Alpha of greater than zero means an investment outperformed, after adjusting for volatility. When hedge fund managers talk about high alpha, they're usually saying that their managers are good enough to outperform the market.
What is a beta stock?
Beta is a way of measuring a stock's volatility compared with the overall market's volatility. The market as a whole has a beta of 1. Stocks with a value greater than 1 are more volatile than the market (meaning they will generally go up more than the market goes up, and go down more than the market goes down).
What is stock beta and alpha?
Key Takeaways. Both alpha and beta are historical measures of past performances. Alpha shows how well (or badly) a stock has performed in comparison to a benchmark index. 1. Beta indicates how volatile a stock's price has been in comparison to the market as a whole.
What is a beta strategy?
Smart beta strategies seek to enhance returns, improve diversification, and reduce risk by investing in customized indexes or ETFs based on one or more predetermined "factors." They aim to outperform, or have less risk than, traditional capitalization-weighted benchmarks but typically have lower expenses than a ...
What beta is good for a stock?
Key Takeaways. Beta is a concept that measures the expected move in a stock relative to movements in the overall market. A beta greater than 1.0 suggests that the stock is more volatile than the broader market, and a beta less than 1.0 indicates a stock with lower volatility.
What is a good PE ratio?
So, what is a good PE ratio for a stock? A “good” P/E ratio isn't necessarily a high ratio or a low ratio on its own. The market average P/E ratio currently ranges from 20-25, so a higher PE above that could be considered bad, while a lower PE ratio could be considered better.
What is a good Sharpe ratio?
Generally speaking, a Sharpe ratio between 1 and 2 is considered good. A ratio between 2 and 3 is very good, and any result higher than 3 is excellent.
What is a stock Delta?
Delta. The ratio of the change in price of an option to the change in price of the underlying asset. Also called the hedge ratio. Applies to derivative products. For a call option on a stock, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50.
What is Gamma stock trading?
Gamma represents the rate of change between an option's Delta and the underlying asset's price. Higher Gamma values indicate that the Delta could change dramatically with even very small price changes in the underlying stock or fund.
What is Theta stock market?
Theta refers to the rate of decline in the value of an option over time. If all other variables are constant, an option will lose value as time draws closer to its maturity. Theta, usually expressed as a negative number, indicates how much the option's value will decline every day up to maturity.
Which are high beta stocks in NSE?
Nifty High Beta 50 ConstituentsNameLastHighAdani Power262.85275.65Ashok Leyland147.80149.45Bank Of Baroda97.40102.30Bank of India44.2044.8044 more rows