The company conducts business under
Oil, Gas & Consumable Fuels sector and is part of
Energy industry.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Alliance Resource has an asset utilization ratio of 72.7 percent. This suggests that the company is making $0.73 for each dollar of assets. An increasing asset utilization means that Alliance Resource Partners is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Alliance Resource, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Alliance Resource along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Alliance Resource's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Alliance Resource. Your research has to be compared to or analyzed against Alliance Resource's peers to derive any actionable benefits. When done correctly, Alliance Resource's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Alliance Resource.
How important is Alliance Resource's Liquidity
Alliance Resource
financial leverage refers to using borrowed capital as a funding source to finance Alliance Resource Partners ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Alliance Resource 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 Alliance Resource'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 Alliance Resource'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 Alliance Resource's total debt and its cash.
Alliance Resource Gross Profit
Alliance Resource Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Alliance Resource 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 Alliance Resource Gross Profit growth over the last 10 years. Please check Alliance Resource's
gross profit and other
fundamental indicators for more details.
Alliance Resource Correlation with Peers
Investors in Alliance can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Alliance Resource Partners. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Alliance Resource and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Alliance is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Alliance for more details
An Additional Perspective On Alliance Resource
Alliance Resource secures Sharpe Ratio (or Efficiency) of -0.0793, which signifies that the company had -0.0793% of return per unit of risk over the last 3 months. Macroaxis standpoint towards foreseeing the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and
technical indicators. Alliance Resource Partners exposes twenty-one different
technical indicators, which can help you to evaluate volatility that cannot be
diversified away. Please be advised to confirm Alliance Resource
mean deviation of 1.94, and Risk Adjusted Performance of
(0.026913) to double-check the risk estimate we provide.
Possible March correction of Alliance?
Recent Risk Adjusted Performance is up to -0.03. Price may decline again. Alliance Resource Partners exhibits very low volatility with skewness of -0.59 and kurtosis of 0.75. However, we advise investors to further study Alliance Resource Partners technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Alliance Resource's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Alliance Resource's 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 stocks as prices fall.
The Bottom Line
Although many other companies in the thermal coal industry are either recovering or due for a correction, Alliance may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither pick up nor exit any shares of Alliance Resource at this time. The Alliance Resource Partners risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Alliance Resource.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Alliance Resource Partners. Please refer to our
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