Rave Restaurant Story

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RAVE -- USA Stock  

USD 1.06  0.11  11.58%

It looks as if Rave Restaurant may not have a good chance to recover from the latest dip as its shares fell again. The company's current daily volatility is 5.68 percent, with a beta of -2.24 and an alpha of -0.8 over DOW. As many millenniums are trying to avoid the latest volatility, we are going to digest Rave Restaurant Group a little further to understand its historical price patterns. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over three months ago
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Should you exit Rave Restaurant Group after the latest volatility dip?
This firm conducts business under Consumer Cyclical sector and is part of Restaurants industry. We provide trade recommendations to complement the recent expert consensus on Rave Restaurant Group. Our dynamic recommendation engine exercises a multidimensional algorithm to analyze the firm's potential to grow using all technical and fundamental data available at the time.
Investing in Rave Restaurant, 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 Rave Restaurant 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 Rave Restaurant's stock 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 Rave Restaurant in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Rave Restaurant. Your research has to be compared to or analyzed against Rave Restaurant's peers to derive any actionable benefits. When done correctly, Rave Restaurant'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 Rave Restaurant Group.

Watch out for price decline

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

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

How Rave Restaurant utilizes its cash?

To perform a cash flow analysis of Rave Restaurant, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Rave Restaurant is receiving and how much cash it distributes out in a given period. The Rave Restaurant cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Rave Restaurant Correlation with Peers

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

Breaking down Rave Restaurant Indicators

Rave Restaurant Group maintains Sharpe Ratio (i.e. Efficiency) of -0.13, which implies the firm had -0.13% of return per unit of risk over the last month. Macroaxis standpoint towards forecasting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Rave Restaurant Group exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check Rave Restaurant Group coefficient of variation of (574.77), and Risk Adjusted Performance of (0.17) to confirm the risk estimate we provide.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Rave Restaurant is getting out of hand

The variance is down to 33.91 as of today. Rave Restaurant Group exhibits very low volatility with skewness of 0.22 and kurtosis of 0.2. However, we advise investors to further study Rave Restaurant Group technical indicators to make sure all market info is available and is reliable. Rave Restaurant Group is a potential penny stock. Although Rave Restaurant may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Rave Restaurant Group. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on this equity instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

Our Takeaway on Rave Restaurant Investment

Although many of the other players in the restaurants industry are either recovering or due for a correction, Rave Restaurant may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Rave Restaurant valuation and our trade advice on Rave Restaurant is due to the recent market swings and your selection of investing horizon. 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 Rave Restaurant.

About Contributor

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 Achuva Shats do not own shares of Rave Restaurant Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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