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How risky is Cree Inc after the latest volatility surge?
 | By Rifka Kats | Macroaxis Story |
It looks as if Cree will continue to recover much faster as its share price surged up 0.06% today. The company's current daily volatility is 2.46 percent, with a beta of 1.31 and an alpha of 0.5 over DOW. As many investors are getting excited about climate change, it is fair to digest Cree Inc. We will evaluate why we are still optimistic in anticipation of a recovery.
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Reviewed by Vlad Skutelnik
Cree Inc currently holds roughly 852.9 M in cash with (26.2 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 7.89. Macroaxis provides unbiased investment recommendation on Cree Inc that should be used to complement current analysts and expert consensus on Cree Inc. Our trade advice engine determines the company's potential to grow exclusively from the perspective of an investors' current risk tolerance and investing horizon.
How important is Cree's Liquidity
Cree financial leverage refers to using borrowed capital as a funding source to finance Cree Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cree 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 Cree'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 Cree'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 Cree's total debt and its cash.
Cree Correlation with Peers
Investors in Cree can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Cree Inc. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Cree and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Cree 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 Cree for more details
What is driving Cree Investor Appetite?
Cree appears to be very steady, given 1 month investment horizon. Cree Inc secures Sharpe Ratio (or Efficiency) of 0.21, which signifies that the company had 0.21% of return per unit of standard deviation over the last month. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. By analyzing Cree Inc technical indicators you can presently evaluate if the expected return of 0.51% is justified by implied risk. Please makes use of Cree Inc risk adjusted performance of 0.4098, and Mean Deviation of 2.14 to double-check if our risk estimates are consistent with your expectations.
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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 Rifka Kats do not own shares of Cree Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.