Nortech Systems Incorporated Stock Volatility
| NSYS Stock | USD 11.89 0.25 2.15% |
We consider Nortech Systems slightly risky. Nortech Systems has Sharpe Ratio of 0.0269, which conveys that the firm had a 0.0269% return per unit of risk over the last 3 months. We have found twenty-seven technical indicators for Nortech Systems, which you can use to evaluate the volatility of the firm. Please verify Nortech Systems' Mean Deviation of 3.4, downside deviation of 5.69, and Risk Adjusted Performance of 0.0222 to check out if the risk estimate we provide is consistent with the expected return of 0.15%. Key indicators related to Nortech Systems' volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Nortech Systems 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 Nortech daily returns, and it is calculated using variance and standard deviation. We also use Nortech's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Nortech Systems volatility.
Nortech |
ESG Sustainability
While most ESG disclosures are voluntary, Nortech Systems' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Nortech Systems' managers and investors.Environmental | Governance | Social |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Nortech Systems 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 Nortech Systems at lower prices. For example, an investor can purchase Nortech 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 Nortech Systems' 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.
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Nortech Systems Market Sensitivity And Downside Risk
Nortech Systems' beta coefficient measures the volatility of Nortech 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 Nortech stock's returns against your selected market. In other words, Nortech Systems's beta of 0.46 provides an investor with an approximation of how much risk Nortech Systems stock can potentially add to one of your existing portfolios. Nortech Systems Incorporated exhibits above-average semi-deviation for your current time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Nortech Systems' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Nortech Systems' 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 Nortech Systems Demand TrendCheck current 90 days Nortech Systems correlation with market (NYSE Composite)Nortech Beta |
Nortech 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 | 5.56 |
It is essential to understand the difference between upside risk (as represented by Nortech Systems's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Nortech Systems' daily returns or price. Since the actual investment returns on holding a position in nortech 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 Nortech Systems.
Nortech Systems Stock Volatility Analysis
Volatility refers to the frequency at which Nortech Systems stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Nortech Systems' price changes. Investors will then calculate the volatility of Nortech Systems' 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 Nortech Systems' volatility:
Historical Volatility
This type of stock volatility measures Nortech Systems' fluctuations based on previous trends. It's commonly used to predict Nortech Systems' 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 Nortech Systems' 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 Nortech Systems' 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. Nortech Systems 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.
Nortech Systems Projected Return Density Against Market
Given the investment horizon of 90 days Nortech Systems has a beta of 0.4575 . This indicates as returns on the market go up, Nortech Systems average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Nortech Systems Incorporated 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 Nortech Systems or Electronic Equipment, Instruments & Components 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 Nortech Systems' 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 Nortech 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.
Nortech Systems Incorporated has an alpha of 0.1035, implying that it can generate a 0.1 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Nortech Systems 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.Nortech Systems Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Nortech Systems is 3711.1. The daily returns are distributed with a variance of 30.91 and standard deviation of 5.56. The mean deviation of Nortech Systems Incorporated is currently at 3.42. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.61
α | Alpha over NYSE Composite | 0.10 | |
β | Beta against NYSE Composite | 0.46 | |
σ | Overall volatility | 5.56 | |
Ir | Information ratio | 0.02 |
Nortech Systems Stock Return Volatility
Nortech Systems historical daily return volatility represents how much of Nortech Systems stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 5.5595% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6183% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Nortech Systems Volatility
Volatility is a rate at which the price of Nortech Systems 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 Nortech Systems may increase or decrease. In other words, similar to Nortech's beta indicator, it measures the risk of Nortech Systems and helps estimate the fluctuations that may happen in a short period of time. So if prices of Nortech Systems 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 | 3.6 M | 3.1 M | |
| Market Cap | 25.6 M | 26.9 M |
Nortech Systems' 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 Nortech Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Nortech Systems' price varies over time.
3 ways to utilize Nortech Systems' volatility to invest better
Higher Nortech Systems' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Nortech Systems 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. Nortech Systems 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 Nortech Systems investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Nortech Systems' 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 Nortech Systems' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Nortech Systems Investment Opportunity
Nortech Systems Incorporated has a volatility of 5.56 and is 8.97 times more volatile than NYSE Composite. Compared to the overall equity markets, volatility of historical daily returns of Nortech Systems Incorporated is lower than 49 percent of all global equities and portfolios over the last 90 days. You can use Nortech Systems Incorporated to enhance the returns of your portfolios. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Nortech Systems to be traded at $14.27 in 90 days.Significant diversification
The correlation between Nortech Systems Incorporated and NYA is 0.05 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Nortech Systems Incorporated and NYA in the same portfolio, assuming nothing else is changed.
Nortech Systems Additional Risk Indicators
The analysis of Nortech Systems' 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 Nortech Systems' investment and either accepting that risk or mitigating it. Along with some common measures of Nortech Systems 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 | 0.0222 | |||
| Market Risk Adjusted Performance | 0.2498 | |||
| Mean Deviation | 3.4 | |||
| Semi Deviation | 4.99 | |||
| Downside Deviation | 5.69 | |||
| Coefficient Of Variation | 4566.16 | |||
| Standard Deviation | 5.47 |
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.
Nortech Systems 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 Nortech Systems 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. Nortech Systems' 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, Nortech Systems' 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 Nortech Systems Incorporated.
When determining whether Nortech Systems is a strong investment it is important to analyze Nortech Systems' 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 Nortech Systems' future performance. For an informed investment choice regarding Nortech Stock, refer to the following important reports: Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Nortech Systems Incorporated. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in manufacturing. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Complementary Tools for Nortech Stock analysis
When running Nortech Systems' price analysis, check to measure Nortech Systems' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Nortech Systems is operating at the current time. Most of Nortech Systems' value examination focuses on studying past and present price action to predict the probability of Nortech Systems' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Nortech Systems' price. Additionally, you may evaluate how the addition of Nortech Systems to your portfolios can decrease your overall portfolio volatility.
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Is Nortech Systems' industry 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 Nortech Systems. If investors know Nortech 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 Nortech Systems 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 0.13 | Earnings Share 2.53 | Revenue Per Share 50.703 | Quarterly Revenue Growth (0.02) | Return On Assets 0.052 |
The market value of Nortech Systems is measured differently than its book value, which is the value of Nortech that is recorded on the company's balance sheet. Investors also form their own opinion of Nortech Systems' value that differs from its market value or its book value, called intrinsic value, which is Nortech Systems' 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 Nortech Systems' market value can be influenced by many factors that don't directly affect Nortech Systems' 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 Nortech Systems' value and its price as these two are different measures arrived at by different means. Investors typically determine if Nortech Systems is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Nortech Systems' 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.