Twitter Stock Volatility

TWTR
 Stock
  

USD 53.70  0.21  0.39%   

Twitter appears to be very steady, given 3 months investment horizon. Twitter owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.19, which indicates the firm had 0.19% of return per unit of risk over the last 3 months. Our standpoint towards measuring the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. By inspecting Twitter technical indicators you can presently evaluate if the expected return of 0.73% is justified by implied risk. Please review Twitter's Risk Adjusted Performance of 0.2165, semi deviation of 1.73, and Coefficient Of Variation of 671.02 to confirm if our risk estimates are consistent with your expectations.
  
Twitter 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 Twitter daily returns, and it is calculated using variance and standard deviation. We also use Twitter's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Twitter volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Barely shadows the market
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Twitter 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 Twitter at lower prices. For example, an investor can purchase Twitter 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 Twitter'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 Twitter

+0.85IPGInterpublic GroupPairCorr
+0.66NWSANews Cp ClPairCorr
+0.87OMCOmnicom GroupPairCorr
+0.71SIRISirius XM HoldingsPairCorr

Moving against Twitter

-0.67SOHUSohu Inc ADRPairCorr
-0.65METAMeta PlatformsPairCorr
-0.59FENGPhoenix New MediaPairCorr

Twitter Market Sensitivity And Downside Risk

Twitter's beta coefficient measures the volatility of Twitter 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 Twitter stock's returns against your selected market. In other words, Twitter's beta of 0.16 provides an investor with an approximation of how much risk Twitter stock can potentially add to one of your existing portfolios.
Twitter currently demonstrates below-average downside deviation. It has Information Ratio of 0.13 and Jensen Alpha of 0.49. However, we advise investors to further question Twitter expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Twitter'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 Twitter'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 Twitter Demand Trend
Check current 90 days Twitter correlation with market (DOW)

Twitter Beta

    
  0.16  
Twitter 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

    
  3.82  
It is essential to understand the difference between upside risk (as represented by Twitter's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Twitter's daily returns or price. Since the actual investment returns on holding a position in twitter 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 Twitter.

Using Twitter Put Option to Manage Risk

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

Twitter's PUT expiring on 2022-11-25

   Profit   
Share
       Twitter Price At Expiration  

Current Twitter Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-11-25 PUT at $80.0-0.79320.013652022-11-2525.05 - 28.1525.8View
Put
2022-11-25 PUT at $58.0-0.7620.059532022-11-253.5 - 6.155.15View
Put
2022-11-25 PUT at $57.0-0.77990.078822022-11-252.04 - 5.155.5View
Put
2022-11-25 PUT at $56.0-0.6730.084882022-11-252.0 - 3.02.2View
Put
2022-11-25 PUT at $54.0-0.56550.4812502022-11-250.33 - 0.50.4View
Put
2022-11-25 PUT at $53.0-0.2810.224632022-11-250.26 - 0.380.28View
Put
2022-11-25 PUT at $52.0-0.22480.114422022-11-250.3 - 0.630.35View
Put
2022-11-25 PUT at $51.0-0.17260.0786652022-11-250.19 - 0.350.31View
Put
2022-11-25 PUT at $50.0-0.14380.05763092022-11-250.16 - 0.30.3View
Put
2022-11-25 PUT at $49.0-0.09190.0416402022-11-250.1 - 0.250.65View
Put
2022-11-25 PUT at $48.0-0.09790.03451632022-11-250.05 - 0.250.24View
View All Twitter Options

Twitter Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Twitter's fluctuations based on previous trends. It's commonly used to predict Twitter'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 Twitter'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 Twitter's to be redeemed at a future date.
Transformation
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Twitter Projected Return Density Against Market

Given the investment horizon of 90 days Twitter has a beta of 0.1566 . This usually implies as returns on the market go up, Twitter average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Twitter 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 Twitter or Communication Services 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 Twitter'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 Twitter 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 0.4854, implying that it can generate a 0.49 percent excess return over DOW after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
Twitter's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how twitter 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 Twitter 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.

Twitter 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 Twitter or Communication Services 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 Twitter'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 Twitter 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 Twitter is 520.89. The daily returns are distributed with a variance of 14.62 and standard deviation of 3.82. The mean deviation of Twitter is currently at 1.86. For similar time horizon, the selected benchmark (DOW) has volatility of 1.41
α
Alpha over DOW
0.49
β
Beta against DOW0.16
σ
Overall volatility
3.82
Ir
Information ratio 0.13

Twitter Stock Return Volatility

Twitter historical daily return volatility represents how much of Twitter stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The enterprise inherits 3.8232% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.385% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About Twitter Volatility

Volatility is a rate at which the price of Twitter 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 Twitter may increase or decrease. In other words, similar to Twitter's beta indicator, it measures the risk of Twitter and helps estimate the fluctuations that may happen in a short period of time. So if prices of Twitter 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 2022
Market Capitalization13.4 B19.7 B

Twitter Investment Opportunity

Twitter has a volatility of 3.82 and is 2.75 times more volatile than DOW. 33  of all equities and portfolios are less risky than Twitter. Compared to the overall equity markets, volatility of historical daily returns of Twitter is lower than 33 () of all global equities and portfolios over the last 90 days. Use Twitter to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a normal downward trend and little activity. Check odds of Twitter to be traded at $53.16 in 90 days.

Significant diversification

The correlation between Twitter and DJI is 0.07 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and DJI in the same portfolio, assuming nothing else is changed.

Twitter Additional Risk Indicators

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

Twitter 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 Twitter 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. Twitter'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, Twitter'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 Twitter.
Additionally, take a look at World Market Map. You can also try Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Tools for Twitter Stock

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