| 2017 | 2018 | 2019 | 2020 (projected) | Cost of Revenue | 5.61 B | 6.5 B | 6.89 B | 6.93 B | Consolidated Income | 899 M | 813 M | 1,000 M | 956.53 M |
Is CNA Financial (NYSE:CNA) a good hedge for your existing portfolios?
 | By Vlad Skutelnik | Macroaxis Story |
Considering the 60-days investment horizon, CNA Financial is expected to generate 1.61 times more return on investment than the market. However, the company is 1.61 times more volatile than its market benchmark. It trades about 0.09 of its potential returns per unit of risk. The DOW is currently generating roughly 0.11 per unit of risk. Since many greedy investors are excited about financial services space, let's go over CNA Financial against its current volatility. We will analyze why some investors are closely monitoring CNA Financial's volatility.
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Reviewed by Rifka Kats
CNA Financial has 2.68 B in debt with debt to equity (D/E) ratio of 0.26, which may show that CNA Financial is not taking advantage of profits from borrowing. The entity has a current ratio of 0.31, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Volatility is a rate at which the price of CNA Financial 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 CNA Financial may increase or decrease. In other words, similar to CNA's beta indicator, it measures the risk of CNA Financial and helps estimate the fluctuations that may happen in a short period of time. So if prices of CNA Financial 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.
How important is CNA Financial's Liquidity
CNA Financial financial leverage refers to using borrowed capital as a funding source to finance CNA Financial ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. CNA Financial 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 CNA Financial'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 CNA Financial'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 CNA Financial's total debt and its cash.
CNA Financial Gross Profit
CNA Financial Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing CNA Financial 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 CNA Financial Gross Profit growth over the last 10 years. Please check CNA Financial's gross profit and other fundamental indicators for more details.
CNA Financial Volatility Drivers
CNA Financial unsystematic risk is unique to CNA Financial 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 CNA Financial you can also buy Selective Insurance Group. You can also mitigate this risk by investing in the financials 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 CNA Financial 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 CNA Financial income statement and balance sheet. Here are more details about CNA volatility.Click cells to compare fundamentals
Breaking it down a bit more
The current bullish price patterns experienced by current CNA Financial shareholders could raise concerns from investors as the firm closed today at a share price of 31.78 on 261,621 in volume. The company executives have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in July. The stock standard deviation of daily returns for 30 days investing horizon is currently 2.61. The current volatility is consistent with the ongoing market swings in July 2020 as well as with CNA Financial unsystematic, company-specific events.
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