How risky is NeuroMetrix after the latest volatility rise?

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NURO Stock  USD 1.43  0.01  0.69%   
Vlad Skutelnik
By Vlad Skutelnik
Macroaxis Story
The entity current daily volatility is 4.22 percent, with a beta of 1.23 and an alpha of -0.09 over Dow Jones Industrial. Whilst many millenniums are getting more into investing against high market volatility, it is quite pruden to outline NeuroMetrix based on its historical prices. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over a month ago
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Reviewed by Gabriel Shpitalnik

NeuroMetrix conducts business under Health Care Equipment & Supplies sector and is part of Health Care industry.
Investing in NeuroMetrix, 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 NeuroMetrix 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, frequently view the market will even out over time. This tendency of NeuroMetrix'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 use the tools below to analyze the current value of NeuroMetrix in the context of predictive analytics.
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as NeuroMetrix. Your research has to be compared to or analyzed against NeuroMetrix's peers to derive any actionable benefits. When done correctly, NeuroMetrix's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in NeuroMetrix.

Watch out for price decline

Please consider monitoring NeuroMetrix on a daily basis if you are holding a position in it. NeuroMetrix is trading at a penny-stock level, and the possibility of delisting is much higher compared to other 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 NeuroMetrix stock to be traded above the $1 level to remain listed. If NeuroMetrix 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 NeuroMetrix's Liquidity

NeuroMetrix financial leverage refers to using borrowed capital as a funding source to finance NeuroMetrix ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. NeuroMetrix 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. Please check the breakdown between NeuroMetrix's total debt and its cash.

How does NeuroMetrix utilize its cash?

To perform a cash flow analysis of NeuroMetrix, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash NeuroMetrix is receiving and how much cash it distributes out in a given period. The NeuroMetrix cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
NeuroMetrix Net Cash Flow from Operations is very stable at the moment as compared to the past year. NeuroMetrix reported last year Net Cash Flow from Operations of (5.29 Million)

NeuroMetrix Correlation with Peers

Investors in NeuroMetrix can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in NeuroMetrix. Diversification will allow for the same portfolio return with reduced risk. The correlation table of NeuroMetrix and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities NeuroMetrix 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 NeuroMetrix for more details

Acquisition by Fluegel Bradley M of 27472 shares of Neurometrix subject to Rule 16b-3

Legal trades by NeuroMetrix insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Neurometrix insider trading alert for grant of common stock by Fluegel Bradley M, the corporate stakeholder, on 6th of July 2022. This event was filed by Neurometrix Inc with SEC on 2022-07-06. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper Perspective

NeuroMetrix appears to be dangerous, given 3 months investment horizon. NeuroMetrix has Sharpe Ratio of 0.0738, which conveys that the firm had 0.0738% of return per unit of risk over the last 3 months. Our standpoint towards estimating the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-seven technical indicators for NeuroMetrix, which you can use to evaluate the future volatility of the firm. Please exercise NeuroMetrix's Risk Adjusted Performance of 0.0281, mean deviation of 3.37, and Downside Deviation of 3.95 to check out if our risk estimates are consistent with your expectations.
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Odds of NeuroMetrix to rebound after the slide

Latest Market Risk Adjusted Performance is up to 0.07. Price may slide again. NeuroMetrix shows above-average downside volatility for the selected time horizon. We advise investors to inspect NeuroMetrix further and ensure that all market timing and asset allocation strategies are consistent with the estimation of NeuroMetrix future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure NeuroMetrix'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 NeuroMetrix'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.

Our Final Perspective on NeuroMetrix

Whereas other companies under the medical devices industry are still a bit expensive, NeuroMetrix may offer a potential longer-term growth to institutional investors. In closing, as of the 27th of January 2023, we believe that at this point, NeuroMetrix is dangerous with low probability of distress within the next 2 years. From a slightly different point of view, the entity appears to be overvalued. Our primary 90 days Buy-Hold-Sell recommendation on the company is Strong Sell.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. 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 Vlad Skutelnik do not own shares of NeuroMetrix. Please refer to our Terms of Use for any information regarding our disclosure principles.

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