Financial Select Sector Etf Volatility
| XLF Etf | USD 41.12 0.01 0.02% |
We consider Financial Select very steady. Financial Select Sector secures Sharpe Ratio (or Efficiency) of 0.15, which denotes the etf had a 0.15% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Financial Select Sector, which you can use to evaluate the volatility of the entity. Please confirm Financial Select's Mean Deviation of 0.552, coefficient of variation of 570.22, and Downside Deviation of 0.7713 to check if the risk estimate we provide is consistent with the expected return of 0.11%. Key indicators related to Financial Select's volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Financial 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 Financial daily returns, and it is calculated using variance and standard deviation. We also use Financial's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Financial Select volatility.
Financial |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Financial Select 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 Financial Select at lower prices. For example, an investor can purchase Financial 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 Financial Select's 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 Financial Etf
| 1.0 | VFH | Vanguard Financials Index | PairCorr |
| 0.98 | IYF | iShares Financials ETF | PairCorr |
| 0.98 | FNCL | Fidelity MSCI Financials | PairCorr |
| 0.98 | IYG | iShares Financial | PairCorr |
| 0.93 | EUFN | iShares MSCI Europe | PairCorr |
| 0.91 | FXO | First Trust Financials | PairCorr |
Moving against Financial Etf
| 0.69 | HUM | Humana Inc Financial Report 7th of August 2024 | PairCorr |
Financial Select Market Sensitivity And Downside Risk
Financial Select's beta coefficient measures the volatility of Financial 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 Financial etf's returns against your selected market. In other words, Financial Select's beta of 0.46 provides an investor with an approximation of how much risk Financial Select etf can potentially add to one of your existing portfolios. Financial Select Sector exhibits relatively low volatility with skewness of -0.27 and kurtosis of -0.12. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Financial 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 Financial 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 Financial Select Sector Demand TrendCheck current 90 days Financial Select correlation with market (NYSE Composite)Financial Beta |
Financial 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 | 0.72 |
It is essential to understand the difference between upside risk (as represented by Financial Select's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Financial Select's daily returns or price. Since the actual investment returns on holding a position in financial 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 Financial Select.
Using Financial Put Option to Manage Risk
Put options written on Financial Select grant holders of the option the right to sell a specified amount of Financial Select at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Financial Etf cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Financial Select's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Financial Select will be realized, the loss incurred will be offset by the profits made with the option trade.
Financial Select's PUT expiring on 2024-04-26
Profit |
| Financial Select Price At Expiration |
Current Financial Select Insurance Chain
| Delta | Gamma | Open Int | Expiration | Current Spread | Last Price | |||
Put | 2024-04-26 PUT at $37.5 | -0.0155 | 0.0218 | 6541 | 2024-04-26 | 0.0 - 0.01 | 0.01 | View |
Put | 2024-04-26 PUT at $38.0 | -0.0175 | 0.0276 | 11831 | 2024-04-26 | 0.0 - 0.01 | 0.01 | View |
Put | 2024-04-26 PUT at $38.5 | -0.0201 | 0.0363 | 316 | 2024-04-26 | 0.0 - 0.22 | 0.01 | View |
Put | 2024-04-26 PUT at $39.0 | -0.0237 | 0.0501 | 615 | 2024-04-26 | 0.01 - 0.02 | 0.01 | View |
Put | 2024-04-26 PUT at $39.5 | -0.0474 | 0.098 | 1846 | 2024-04-26 | 0.01 - 0.21 | 0.02 | View |
Put | 2024-04-26 PUT at $40.0 | -0.0796 | 0.1793 | 1892 | 2024-04-26 | 0.02 - 0.03 | 0.03 | View |
Put | 2024-04-26 PUT at $40.5 | -0.1518 | 0.3732 | 2928 | 2024-04-26 | 0.05 - 0.28 | 0.05 | View |
Put | 2024-04-26 PUT at $41.0 | -0.3998 | 0.6934 | 826 | 2024-04-26 | 0.07 - 0.34 | 0.16 | View |
Put | 2024-04-26 PUT at $41.5 | -0.7292 | 0.5664 | 399 | 2024-04-26 | 0.2 - 1.23 | 0.46 | View |
Put | 2024-04-26 PUT at $42.0 | -0.9137 | 0.2535 | 67 | 2024-04-26 | 0.39 - 1.15 | 0.89 | View |
Put | 2024-04-26 PUT at $42.5 | -0.8316 | 0.1836 | 51 | 2024-04-26 | 0.74 - 2.23 | 2.79 | View |
Financial Select Sector Etf Volatility Analysis
Volatility refers to the frequency at which Financial Select etf price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Financial Select's price changes. Investors will then calculate the volatility of Financial 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 Financial Select's volatility:
Historical Volatility
This type of etf volatility measures Financial Select's fluctuations based on previous trends. It's commonly used to predict Financial 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 Financial 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 Financial 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. Financial 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.
Financial Select Projected Return Density Against Market
Considering the 90-day investment horizon Financial Select has a beta of 0.4622 . This entails as returns on the market go up, Financial Select average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Financial Select Sector will be expected to be much smaller as well.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 Financial 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 Financial 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 Financial 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.
Financial Select Sector has an alpha of 0.0742, implying that it can generate a 0.0742 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Financial 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.Financial Select Etf Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Financial Select is 673.84. The daily returns are distributed with a variance of 0.52 and standard deviation of 0.72. The mean deviation of Financial Select Sector is currently at 0.57. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.62
α | Alpha over NYSE Composite | 0.07 | |
β | Beta against NYSE Composite | 0.46 | |
σ | Overall volatility | 0.72 | |
Ir | Information ratio | 0.04 |
Financial Select Etf Return Volatility
Financial Select historical daily return volatility represents how much of Financial Select etf's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The Exchange Traded Fund has volatility of 0.7189% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.6372% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Financial Select Volatility
Volatility is a rate at which the price of Financial 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 Financial Select may increase or decrease. In other words, similar to Financial's beta indicator, it measures the risk of Financial Select and helps estimate the fluctuations that may happen in a short period of time. So if prices of Financial 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.The fund generally invests substantially all, but at least 95, of its total assets in the securities comprising the index. SP 500 is traded on NYSEARCA Exchange in the United States.
Financial 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 Financial Etf over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Financial Select's price varies over time.
3 ways to utilize Financial Select's volatility to invest better
Higher Financial 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 Financial 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. Financial 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 Financial Select Sector investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Financial 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 Financial Select's etf relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Financial Select Investment Opportunity
Financial Select Sector has a volatility of 0.72 and is 1.13 times more volatile than NYSE Composite. Compared to the overall equity markets, volatility of historical daily returns of Financial Select Sector is lower than 6 percent of all global equities and portfolios over the last 90 days. You can use Financial Select Sector to protect your portfolios against small market fluctuations. The etf experiences a normal downward trend and little activity. Check odds of Financial Select to be traded at $40.71 in 90 days.Very weak diversification
The correlation between Financial Select Sector and NYA is 0.41 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Financial Select Sector and NYA in the same portfolio, assuming nothing else is changed.
Financial Select Additional Risk Indicators
The analysis of Financial 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 Financial Select's investment and either accepting that risk or mitigating it. Along with some common measures of Financial 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 | 0.1105 | |||
| Market Risk Adjusted Performance | 0.2559 | |||
| Mean Deviation | 0.552 | |||
| Semi Deviation | 0.6308 | |||
| Downside Deviation | 0.7713 | |||
| Coefficient Of Variation | 570.22 | |||
| Standard Deviation | 0.7051 |
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.
Financial 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 Financial 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. Financial 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, Financial 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 Financial Select Sector.
When determining whether Financial Select Sector is a strong investment it is important to analyze Financial Select'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 Financial Select's future performance. For an informed investment choice regarding Financial Etf, refer to the following important reports: Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Financial Select Sector. Also, note that the market value of any etf could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
The market value of Financial Select Sector is measured differently than its book value, which is the value of Financial that is recorded on the company's balance sheet. Investors also form their own opinion of Financial Select's value that differs from its market value or its book value, called intrinsic value, which is Financial 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 Financial Select's market value can be influenced by many factors that don't directly affect Financial 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 Financial Select's value and its price as these two are different measures arrived at by different means. Investors typically determine if Financial Select is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Financial 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.