Luna Innovations Incorporated Stock Volatility

LUNA Stock  USD 3.37  0.23  7.32%   
Luna Innovations rporated has Sharpe Ratio of -0.15, which conveys that the firm had a -0.15% return per unit of risk over the last 3 months. Luna Innovations exposes twenty-two different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please verify Luna Innovations' Standard Deviation of 5.84, mean deviation of 3.28, and Risk Adjusted Performance of (0.08) to check out the risk estimate we provide. Key indicators related to Luna Innovations' volatility include:
30 Days Market Risk
Chance Of Distress
30 Days Economic Sensitivity
Luna Innovations 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 Luna daily returns, and it is calculated using variance and standard deviation. We also use Luna's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Luna Innovations volatility.
  
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Luna Innovations 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 Luna Innovations at lower prices. For example, an investor can purchase Luna 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 Luna Innovations' 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 Luna Stock

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Moving against Luna Stock

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  0.56NOVT Novanta Financial Report 14th of May 2024 PairCorr
  0.52KNW Know Labs Financial Report 20th of May 2024 PairCorr
  0.5GNSS Genasys Tech BoostPairCorr
  0.44AWINW AERWINS TechnologiesPairCorr
  0.41BMI Badger Meter Fiscal Quarter End 31st of March 2024 PairCorr

Luna Innovations Market Sensitivity And Downside Risk

Luna Innovations' beta coefficient measures the volatility of Luna stock compared to the systematic risk of the entire 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 Luna stock's returns against your selected market. In other words, Luna Innovations's beta of 2.91 provides an investor with an approximation of how much risk Luna Innovations stock can potentially add to one of your existing portfolios. Luna Innovations Incorporated exhibits very low volatility with skewness of -3.67 and kurtosis of 19.65. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Luna Innovations' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Luna Innovations' 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 financial instruments as prices fall.
3 Months Beta |Analyze Luna Innovations rporated Demand Trend
Check current 90 days Luna Innovations correlation with market (NYSE Composite)

Luna Beta

    
  2.91  
Luna standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity 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

    
  6.02  
It is essential to understand the difference between upside risk (as represented by Luna Innovations's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Luna Innovations' daily returns or price. Since the actual investment returns on holding a position in luna 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 Luna Innovations.

Using Luna Put Option to Manage Risk

Put options written on Luna Innovations grant holders of the option the right to sell a specified amount of Luna Innovations 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 Luna Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Luna Innovations' 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 Luna Innovations will be realized, the loss incurred will be offset by the profits made with the option trade.

Luna Innovations' PUT expiring on 2024-04-19

   Profit   
       Luna Innovations Price At Expiration  

Current Luna Innovations Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2024-04-19 PUT at $7.5-0.61020.112512024-04-193.9 - 5.53.68View
Put
2024-04-19 PUT at $5.0-0.82220.21731262024-04-191.55 - 1.91.55View
Put
2024-04-19 PUT at $2.5-0.15960.19531882024-04-190.05 - 0.20.15View
View All Luna Innovations Options

Luna Innovations rporated Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Luna Innovations' fluctuations based on previous trends. It's commonly used to predict Luna Innovations' 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 Luna Innovations' 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 Luna Innovations' 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. Luna Innovations rporated 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.

Luna Innovations Projected Return Density Against Market

Given the investment horizon of 90 days the stock has the beta coefficient of 2.9076 . This 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, Luna Innovations will likely underperform.
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 Luna Innovations or Electronic Equipment, Instruments & Components 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 Luna Innovations' 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 Luna 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.
Luna Innovations Incorporated has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming NYSE Composite.
   Predicted Return Density   
       Returns  
Luna Innovations' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how luna 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 Luna Innovations Price Volatility?

Several factors can influence a stock's market 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.

Luna Innovations Stock Risk Measures

Given the investment horizon of 90 days the coefficient of variation of Luna Innovations is -672.95. The daily returns are distributed with a variance of 36.19 and standard deviation of 6.02. The mean deviation of Luna Innovations Incorporated is currently at 3.33. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.56
α
Alpha over NYSE Composite
-1.26
β
Beta against NYSE Composite2.91
σ
Overall volatility
6.02
Ir
Information ratio -0.18

Luna Innovations Stock Return Volatility

Luna Innovations historical daily return volatility represents how much of Luna Innovations stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company inherits 6.0162% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.5731% volatility on return distribution over the 90 days horizon.
 Performance 
       Timeline  

About Luna Innovations Volatility

Volatility is a rate at which the price of Luna Innovations 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 Luna Innovations may increase or decrease. In other words, similar to Luna's beta indicator, it measures the risk of Luna Innovations and helps estimate the fluctuations that may happen in a short period of time. So if prices of Luna Innovations 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 ReportedProjected for 2024
Selling And Marketing ExpensesM5.3 M
Luna Innovations' stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Luna Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Luna Innovations' price varies over time.

3 ways to utilize Luna Innovations' volatility to invest better

Higher Luna Innovations' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Luna Innovations rporated stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Luna Innovations rporated stock volatility can provide helpful information for making investment decisions in the following ways:
  • Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Luna Innovations rporated investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in Luna Innovations' stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
  • Diversification: Understanding how the volatility of Luna Innovations' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.

Luna Innovations Investment Opportunity

Luna Innovations Incorporated has a volatility of 6.02 and is 10.56 times more volatile than NYSE Composite. 53 percent of all equities and portfolios are less risky than Luna Innovations. You can use Luna Innovations Incorporated to enhance the returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Luna Innovations to be traded at $4.21 in 90 days.

Modest diversification

The correlation between Luna Innovations Incorporated and NYA is 0.28 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Luna Innovations Incorporated and NYA in the same portfolio, assuming nothing else is changed.

Luna Innovations Additional Risk Indicators

The analysis of Luna Innovations' 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 Luna Innovations' investment and either accepting that risk or mitigating it. Along with some common measures of Luna Innovations 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.

Luna Innovations 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 Luna Innovations 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. Luna Innovations' 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, Luna Innovations' 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 Luna Innovations Incorporated.
When determining whether Luna Innovations rporated offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Luna Innovations' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Luna Innovations Incorporated Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Luna Innovations Incorporated Stock:
Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Luna Innovations Incorporated. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in board of governors.
You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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When running Luna Innovations' price analysis, check to measure Luna Innovations' 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 Luna Innovations is operating at the current time. Most of Luna Innovations' value examination focuses on studying past and present price action to predict the probability of Luna Innovations' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Luna Innovations' price. Additionally, you may evaluate how the addition of Luna Innovations to your portfolios can decrease your overall portfolio volatility.
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Is Luna Innovations' 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 Luna Innovations. If investors know Luna 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 Luna Innovations listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.68)
Earnings Share
(0.03)
Revenue Per Share
3.487
Quarterly Revenue Growth
0.053
Return On Assets
0.0055
The market value of Luna Innovations rporated is measured differently than its book value, which is the value of Luna that is recorded on the company's balance sheet. Investors also form their own opinion of Luna Innovations' value that differs from its market value or its book value, called intrinsic value, which is Luna Innovations' 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 Luna Innovations' market value can be influenced by many factors that don't directly affect Luna Innovations' 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 Luna Innovations' value and its price as these two are different measures arrived at by different means. Investors typically determine if Luna Innovations is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Luna Innovations' 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.