# Robinhood Stock Volatility

HOOD | - USA Stock | ## USD 10.24 0.45 4.21% |

Robinhood Markets maintains Sharpe Ratio (i.e., Efficiency) of -0.0281, which implies the firm had -0.0281% of return per unit of risk over the last 3 months. 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. Robinhood Markets exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check Robinhood Markets risk adjusted performance of (0.032418), and Coefficient Of Variation of (3,203) to confirm the risk estimate we provide.

Robinhood |

Robinhood Markets 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 Robinhood daily returns, and it is calculated using variance and standard deviation. We also use Robinhood's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Robinhood Markets volatility.

### 30 Days Market Risk

### Chance of Distress

### 30 Days Economic Sensitivity

Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Robinhood Markets 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 Robinhood Markets at lower prices. For example, an investor can purchase Robinhood 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 Robinhood Markets' 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.

## Robinhood Markets Market Sensitivity And Downside Risk

Robinhood Markets' beta coefficient measures the volatility of Robinhood 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 Robinhood stock's returns against your selected market. In other words, Robinhood Markets's beta of 2.43 provides an investor with an approximation of how much risk Robinhood Markets stock can potentially add to one of your existing portfolios.

Let's try to break down what Robinhood's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Robinhood Markets will likely underperform. 3 Months Beta |Analyze Robinhood Markets Demand TrendCheck current 90 days Robinhood Markets correlation with market (DOW)

Robinhood 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.

## Robinhood Beta |

## Standard Deviation | 6.63 |

It is essential to understand the difference between upside risk (as represented by Robinhood Markets's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Robinhood Markets stock's daily returns or price. Since the actual investment returns on holding a position in Robinhood Markets 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 Robinhood Markets.

## Robinhood Markets Implied Volatility | 124.45 |

Robinhood Markets' implied volatility exposes the market's sentiment of Robinhood Markets stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Robinhood Markets' 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 Robinhood Markets stock will not fluctuate a lot when Robinhood Markets' options are near their expiration.

## Robinhood Markets Stock Volatility Analysis

Volatility refers to the frequency at which Robinhood Markets stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Robinhood Markets' price changes. Investors will then calculate the volatility of Robinhood Markets' 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 Robinhood Markets' volatility:### Historical Volatility

This type of stock volatility measures Robinhood Markets' fluctuations based on previous trends. It's commonly used to predict Robinhood Markets' 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 Robinhood Markets' current market price. This means that the stock will return to its initially predicted market price.Transformation |

The output start index for this execution was zero with a total number of output elements of sixty-one. Robinhood Markets Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input..

## Robinhood Markets Projected Return Density Against Market

Given the investment horizon of 90 days the stock has the beta coefficient of 2.4338 . This usually indicates as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Robinhood Markets will likely underperform.

Robinhood Markets' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Robinhood Markets 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. 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 Robinhood Markets or Technology 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 Robinhood Markets stock'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 Robinhood 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 0.1789, implying that it can generate a 0.18 percent excess return over DOW after adjusting for the inherited market risk (beta). Predicted Return Density |

Returns |

## What Drives a Company's Stock Price Volatility?

Several factors can influence a company'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.## Robinhood Markets 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 Robinhood Markets or Technology 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 Robinhood Markets stock'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 Robinhood 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 Robinhood Markets is -3563.88. The daily returns are distributed with a variance of 44.01 and standard deviation of 6.63. The mean deviation of Robinhood Markets is currently at 4.71. For similar time horizon, the selected benchmark (DOW) has volatility of 1.29

α | Alpha over DOW | 0.18 | |

β | Beta against DOW | 2.43 | |

σ | Overall volatility | 6.63 | |

Ir | Information ratio | -0.008 |

## Robinhood Markets Stock Return Volatility

Robinhood Markets historical daily return volatility represents how much Robinhood Markets stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The firm inherits 6.634% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.2925% risk (volatility on return distribution) over the 90 days horizon.

Performance (%) |

Timeline |

## About Robinhood Markets Volatility

Volatility is a rate at which the price of Robinhood Markets 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 Robinhood Markets may increase or decrease. In other words, similar to Robinhood's beta indicator, it measures the risk of Robinhood Markets and helps estimate the fluctuations that may happen in a short period of time. So if prices of Robinhood Markets 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.Last Reported | Projected for 2022 | |

Market Capitalization | 13.7 B | 13.7 B |

### Nearest Robinhood long CALL Option Payoff at Expiration

Robinhood Markets' implied volatility is one of the determining factors in the pricing options written on Robinhood Markets. Implied volatility approximates the future value of Robinhood Marketsusing the option's current value. Options with high implied volatility have higher premiums and can be used to hedge the downside of investing in Robinhood Markets over a specific time period.View All Robinhood options2022-05-20 CALL at $3.0 is a CALL option contract on Robinhood Markets' common stock with a strick price of 3.0 expiring on 2022-05-20. The contract was last traded on 2022-05-13 at 10:14:05 for $7.42 and, as of today, has 4 days remaining before the expiration. The option is currently trading at a bid price of $7.65, and an ask price of $7.8. The implied volatility as of the 16th of May 2022 is 471.9484. Profit |

Robinhood Markets Price At Expiration |

## Robinhood Markets Investment Opportunity

Robinhood Markets has a volatility of 6.63 and is 5.14 times more volatile than DOW.

**57**of all equities and portfolios are less risky than Robinhood Markets. Compared to the overall equity markets, volatility of historical daily returns of Robinhood Markets is higher than**57 ()**of all global equities and portfolios over the last 90 days. Use Robinhood Markets to protect your portfolios against small market fluctuations. The stock experiences a very speculative upward sentiment. Check odds of Robinhood Markets to be traded at $9.73 in 90 days. . Let's try to break down what Robinhood's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Robinhood Markets will likely underperform.### Very weak diversification

The correlation between Robinhood Markets Inc and DJI is

**Very weak diversification**for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Robinhood Markets Inc and DJI in the same portfolio assuming nothing else is changed.## Robinhood Markets Additional Risk Indicators

The analysis of Robinhood Markets' 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 Robinhood Markets' investment and either accepting that risk or mitigating it. Along with some common measures of Robinhood Markets stock 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.

Risk Adjusted Performance | (0.032418) | |||

Market Risk Adjusted Performance | (0.08) | |||

Mean Deviation | 4.6 | |||

Coefficient Of Variation | (3,203) | |||

Standard Deviation | 6.5 | |||

Variance | 42.21 | |||

Information Ratio | (0.007983) |

Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

## Robinhood Markets 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 Robinhood Markets 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. Robinhood Markets' 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, Robinhood Markets' 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 Robinhood Markets.

Please check Risk vs Return Analysis. Note that the Robinhood Markets information on this page should be used as a complementary analysis to other Robinhood Markets' 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

## Complementary Tools for Robinhood Stock analysis

When running Robinhood Markets price analysis, check to measure Robinhood Markets' 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 Robinhood Markets is operating at the current time. Most of Robinhood Markets' value examination focuses on studying past and present price action to predict the probability of Robinhood Markets' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Robinhood Markets' price. Additionally, you may evaluate how the addition of Robinhood Markets to your portfolios can decrease your overall portfolio volatility.

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The market value of Robinhood Markets is measured differently than its book value, which is the value of Robinhood that is recorded on the company's balance sheet. Investors also form their own opinion of Robinhood Markets' value that differs from its market value or its book value, called intrinsic value, which is Robinhood Markets' 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 Robinhood Markets' market value can be influenced by many factors that don't directly affect Robinhood Markets' 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 Robinhood Markets' value and its price as these two are different measures arrived at by different means. Investors typically determine Robinhood Markets value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Robinhood Markets' 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.