How risky is to double down on Sphere 3D in August?
 | By Ellen Johnson | Macroaxis Story |
Considering the 60-days investment horizon, Sphere 3D is expected to generate 6.66 times more return on investment than the market. However, the company is 6.66 times more volatile than its market benchmark. It trades about 0.23 of its potential returns per unit of risk. The DOW is currently generating roughly 0.1 per unit of risk. As many old-fashioned traders are trying to avoid technology space, it makes sense to break down Sphere 3D Corp a little further and try to understand its current volatility patterns. We will cover the possibilities of Sphere 3D's current volatility to continue through August.
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Reviewed by Gabriel Shpitalnik
The company has 1.22 M in debt with debt to equity (D/E) ratio of 6.05, demonstrating that Sphere 3D may be unable to create cash to meet all of its financial commitments. Sphere 3D Corp has a current ratio of 0.28, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Sphere 3D holds a performance score of 16 on a scale of zero to a hundred. The entity has a beta of 0.5353, which indicates possible diversification benefits within a given portfolio. Let's try to break down what Sphere's beta means in this case. As returns on the market increase, Sphere 3D returns are expected to increase less than the market. However, during the bear market, the loss on holding Sphere 3D will be expected to be smaller as well. Although it is essential to pay attention to Sphere 3D Corp current price movements, it is also good to be reasonable about what you can do with equity historical returns. Our philosophy towards measuring future potential of any stock is to look not only at its past charts but also at the business as a whole, including all available fundamental and technical indicators. To evaluate if Sphere 3D Corp expected return of 2.61 will be sustainable into the future, we have found twenty-eight different technical indicators, which can help you to check if the expected returns are sustainable. Use Sphere 3D Corp total risk alpha, as well as the relationship between the downside variance and daily balance of power to analyze future returns on Sphere 3D Corp. Volatility is a rate at which the price of Sphere 3D 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 Sphere 3D may increase or decrease. In other words, similar to Sphere's beta indicator, it measures the risk of Sphere 3D and helps estimate the fluctuations that may happen in a short period of time. So if prices of Sphere 3D 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.
Watch out for price decline
Please consider monitoring Sphere 3D on a daily basis if you are holding a position in it. Sphere 3D is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Sphere 3D stock to be traded above the $1 level to remain listed. If Sphere 3D stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Sphere 3D's Liquidity
Sphere 3D financial leverage refers to using borrowed capital as a funding source to finance Sphere 3D Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Sphere 3D financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Sphere 3D's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Sphere 3D's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Sphere 3D's total debt and its cash.
Sphere 3D Gross Profit
Sphere 3D Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Sphere 3D previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Sphere 3D Gross Profit growth over the last 10 years. Please check Sphere 3D's gross profit and other fundamental indicators for more details.
Sphere 3D Volatility Drivers
Sphere 3D unsystematic risk is unique to Sphere 3D Corp and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Sphere 3D you can also buy Autodesk. You can also mitigate this risk by investing in the information technology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Sphere 3D important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Sphere 3D income statement and balance sheet. Here are more details about Sphere volatility.Click cells to compare fundamentals
Breaking it down a bit more
The latest price spikes of Sphere 3D could raise concerns from investors as the company closed today at a share price of 2.8 on 309,095 in volume. The company management teams may have good odds in positioning the company resources to exploit market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 11.26. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Sphere 3D Corp partners.
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