Canoo Stock Volatility

GOEV
 Stock
  

USD 1.73  0.14  7.49%   

Canoo Inc secures Sharpe Ratio (or Efficiency) of -0.0184, which signifies that the company had -0.0184% of return per unit of risk over the last 3 months. Macroaxis standpoint towards foreseeing 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. Canoo Inc exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Canoo Inc Risk Adjusted Performance of 0.0562, mean deviation of 5.76, and Downside Deviation of 5.44 to double-check the risk estimate we provide.
  
Canoo Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Canoo daily returns, and it is calculated using variance and standard deviation. We also use Canoo's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Canoo volatility.

180 Days Market Risk

Very risky

Chance of Distress

Below Average

180 Days Economic Sensitivity

Almost mirrors the market
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Canoo can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Canoo at lower prices. For example, an investor can purchase Canoo stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Canoo's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with Canoo

+0.78TMToyota Motor CorpPairCorr
+0.78TOYOFTOYOTA MOTOR CORPPairCorr

Moving against Canoo

-0.56NTNXNutanixPairCorr

Canoo Market Sensitivity And Downside Risk

Canoo's beta coefficient measures the volatility of Canoo stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Canoo stock's returns against your selected market. In other words, Canoo's beta of 0.33 provides an investor with an approximation of how much risk Canoo stock can potentially add to one of your existing portfolios.
Canoo Inc is displaying above-average volatility over the selected time horizon. Investors should scrutinize Canoo Inc independently to ensure intended market timing strategies are aligned with expectations about Canoo volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Canoo'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 Canoo'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.
3 Months Beta |Analyze Canoo Inc Demand Trend
Check current 90 days Canoo correlation with market (DOW)

Canoo Beta

    
  0.33  
Canoo standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  9.28  
It is essential to understand the difference between upside risk (as represented by Canoo's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Canoo's daily returns or price. Since the actual investment returns on holding a position in canoo stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Canoo.

Using Canoo Put Option to Manage Risk

Put options written on Canoo grant holders of the option the right to sell a specified amount of Canoo at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Canoo Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Canoo's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Canoo will be realized, the loss incurred will be offset by the profits made with the option trade.

Canoo's PUT expiring on 2022-10-07

   Profit   
Share
       Canoo Price At Expiration  

Current Canoo Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-10-07 PUT at $4.0-0.8160.227112022-10-071.96 - 2.221.65View
Put
2022-10-07 PUT at $3.0-0.79380.3374352022-10-071.04 - 1.291.21View
Put
2022-10-07 PUT at $2.5-0.88820.46512992022-10-070.59 - 0.660.65View
Put
2022-10-07 PUT at $2.0-0.69541.59126022022-10-070.15 - 0.220.17View
Put
2022-10-07 PUT at $1.5-0.10670.51191532022-10-070.0 - 0.010.02View
View All Canoo Options

Canoo Inc Stock Volatility Analysis

Volatility refers to the frequency at which Canoo stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Canoo's price changes. Investors will then calculate the volatility of Canoo's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Canoo's volatility:

Historical Volatility

This type of stock volatility measures Canoo's fluctuations based on previous trends. It's commonly used to predict Canoo's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Canoo's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Canoo's to be redeemed at a future date.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. The Median Price line plots median indexes of Canoo Inc price series.
.

Canoo Projected Return Density Against Market

Given the investment horizon of 90 days Canoo has a beta of 0.3322 . This usually indicates as returns on the market go up, Canoo average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Canoo Inc will be expected to be much smaller as well.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Canoo or Consumer Cyclical sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Canoo's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Canoo stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has an alpha of 0.3656, implying that it can generate a 0.37 percent excess return over DOW after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
Canoo's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how canoo stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Canoo Price Volatility?

Several factors can influence a Stock's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Canoo Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Canoo or Consumer Cyclical sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Canoo's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Canoo stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Given the investment horizon of 90 days the coefficient of variation of Canoo is -5420.34. The daily returns are distributed with a variance of 86.09 and standard deviation of 9.28. The mean deviation of Canoo Inc is currently at 5.48. For similar time horizon, the selected benchmark (DOW) has volatility of 1.23
α
Alpha over DOW
0.37
β
Beta against DOW0.33
σ
Overall volatility
9.28
Ir
Information ratio 0.0415

Canoo Stock Return Volatility

Canoo historical daily return volatility represents how much of Canoo stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The venture inherits 9.2783% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.2394% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About Canoo Volatility

Volatility is a rate at which the price of Canoo 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 Canoo may increase or decrease. In other words, similar to Canoo's beta indicator, it measures the risk of Canoo and helps estimate the fluctuations that may happen in a short period of time. So if prices of Canoo 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.
Canoo Inc., a mobility technology company, designs, engineers, develops, and manufactures electric vehicles for commercial and consumer markets in the United States. Canoo Inc. was founded in 2017 and is headquartered in Torrance, California. Canoo operates under Auto Manufacturers classification in the United States and is traded on NASDAQ Exchange. It employs 805 people.

Canoo Investment Opportunity

Canoo Inc has a volatility of 9.28 and is 7.48 times more volatile than DOW. 80  of all equities and portfolios are less risky than Canoo. Compared to the overall equity markets, volatility of historical daily returns of Canoo Inc is higher than 80 () of all global equities and portfolios over the last 90 days. Use Canoo Inc to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a very speculative upward sentiment. Check odds of Canoo to be traded at $1.6435 in 90 days.

Significant diversification

The correlation between Canoo Inc and DJI is 0.04 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Inc and DJI in the same portfolio, assuming nothing else is changed.

Canoo Additional Risk Indicators

The analysis of Canoo's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Canoo's investment and either accepting that risk or mitigating it. Along with some common measures of Canoo stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Canoo Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Canoo as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Canoo's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Canoo's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Canoo Inc.
Please check Risk vs Return Analysis. Note that the Canoo Inc information on this page should be used as a complementary analysis to other Canoo's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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When running Canoo Inc price analysis, check to measure Canoo's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Canoo is operating at the current time. Most of Canoo's value examination focuses on studying past and present price action to predict the probability of Canoo's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Canoo's price. Additionally, you may evaluate how the addition of Canoo to your portfolios can decrease your overall portfolio volatility.
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Is Canoo's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Canoo. If investors know Canoo will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Canoo listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Canoo Inc is measured differently than its book value, which is the value of Canoo that is recorded on the company's balance sheet. Investors also form their own opinion of Canoo's value that differs from its market value or its book value, called intrinsic value, which is Canoo's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Canoo's market value can be influenced by many factors that don't directly affect Canoo's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Canoo's value and its price as these two are different measures arrived at by different means. Investors typically determine Canoo value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Canoo's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.