By analyzing existing basic indicators between High Tide and DRUGSTORE, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in DRUGSTORE with a short position in High Tide. Check out our
pair correlation module for more information.
Let's begin by analyzing the assets.
One of the ways to look at asset utilization of High Tide is to check how much profit was generated for every dollar of assets it reports. High Tide retains a negative application of resources of -5.1 (percent), losing $0.051 for each dollar of resources held by the firm. Inadequate asset utilization attests that the company is being less effective with each dollar of resources it retains. Simply put, asset utilization of High Tide shows how discouraging it operates for each dollar spent on its resources.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as High or PetMed is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is High Tide's Liquidity
High Tide
financial leverage refers to using borrowed capital as a funding source to finance High Tide ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. High Tide 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 High Tide'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 High Tide'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 High Tide's total debt and its cash.
Correlation Between High and PetMed Express
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding High Tide together with similar or unrelated positions with a negative correlation. For example, you can also add PetMed Express to your portfolio. If PetMed Express is not perfectly correlated to High Tide it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When High Tide, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both High Tide and PetMed Express in your portfolio? Please note if you are using this as a pair-trade strategy between High Tide and PetMed Express, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between HITI and PETS for more information.
Will High Tide price drop impact its balance sheet?
Current standard deviation is at 6.42. High Tide is displaying above-average volatility over the selected time horizon. Investors should scrutinize High Tide independently to ensure intended market timing strategies are aligned with expectations about High Tide volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure High Tide's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact High Tide'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.
High Tide Implied Volatility
High Tide's implied volatility exposes the market's sentiment of High Tide stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if High Tide's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that High Tide stock will not fluctuate a lot when High Tide's options are near their expiration.
Our Conclusion on High Tide
While few other entities in the pharmaceutical retailers industry are either recovering or due for a correction, High Tide may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the current economy, it is better to hold off any trading of High Tide as the current risk-reward utility is not appealing enough. 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 High Tide.
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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 High Tide. Please refer to our
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