The big decline in price over the last few months for Azure Power Global could raise concerns from shareholders as the firm is trading at a share price of 5.67 on 283,100 in volume. The company management teams failed to add value to investors and position the firm supply of money to exploit market volatility in October. However, diversifying your holdings with Azure Power Global or similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 9.79. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Azure Power partners.
Azure Power (NYSE:AZRE) is to drop even more in December
 | By Ellen Johnson | Macroaxis Story |
The fundamental objective of this short story is to break down our forecasting of Azure for shareholders. We will try to forecast Azure Power outlook for December.
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Reviewed by Vlad Skutelnik
The company has a beta of 2.4267. Let's try to break down what Azure's beta means in this case. As returns on the market increase, Azure Power returns are expected to increase less than the market. However, during the bear market, the loss on holding Azure Power will be expected to be smaller as well. The beta indicator helps investors understand whether Azure Power moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Azure deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Azure Power. Your research has to be compared to or analyzed against Azure Power's peers to derive any actionable benefits. When done correctly, Azure Power'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 Azure Power Global.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Azure Power Global. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Azure Power
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Azure Power'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.
Watch out for price decline
Please consider monitoring Azure Power on a daily basis if you are holding a position in it. Azure Power is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted 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 Azure Power stock to be traded above the $1 level to remain listed. If Azure Power 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 Azure Power's Liquidity
Azure Power financial leverage refers to using borrowed capital as a funding source to finance Azure Power Global ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Azure Power 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 Azure Power'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 Azure Power'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 Azure Power's total debt and its cash.
A Deeper Perspective
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