VeChain Volatility

Since volatility provides cryptocurrency investors with entry points to take advantage of coin prices, investors in projects such as VeChain can benefit from it. Downward market volatility can be a perfect environment for traders who play the long game. Here, they may buy additional VeChain shares at lower prices. For example, an investor can purchase VeChain coin 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 VeChain's crypto rise, investors can sell out and invest the proceeds in other coins with better opportunities. Investing in volatile markets will allow investors in evolving Defi or crypto projects such as VeChain to generate better long-term returns.

VeChain's beta coefficient measures the volatility of VeChain crypto coin 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 VeChain crypto coin's returns against your selected market. In other words, VeChain's beta of 0.94 provides an investor with an approximation of how much risk VeChain crypto coin can potentially add to one of your existing portfolios. VeChain is displaying above-average volatility over the selected time horizon. Investors should scrutinize VeChain independently to ensure intended cryptocurrency market timing strategies are aligned with expectations about VeChain volatility. VeChain appears to be a penny crypto. Although VeChain may be, in fact, a solid short-term or long term investment, many penny crypto coins are speculative digital assets that are often subject to artificial coin promotions and campaigns of hype which may lead to misinformation and misrepresentation. Please make sure you fully understand upside potential and downside risks of investing in VeChain crypto or similar risky assets. We encourage cryptocurrency investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswing without any event/news,and sudden news releases. We also encourage crypto traders to check the biographies and work history of the founders of the accociated project, carefully read the white papers and consensus ducoments before investing in high-volatility coins. You can indeed make money on VeChain if you perfectly time your entry and exit. However, remember that cryptos that have been the subject of artificial hype usually cannot maintain its increased price for more than a few days. The price of a promoted high-volatility instrument will almost always revert. The only way to increase coin holder value is through legitimate performance analysis backed up by solid fundamentals of the project the coin represents. Understanding different market volatility trends often help investors time the market. Properly using volatility indicators enable traders to measure VeChain's crypto coin risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact VeChain's price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different cryptos as prices fall or investing in DeFi projects.

VeChain 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.

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

Volatility refers to the frequency at which VeChain crypto price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with VeChain's price changes. Investors will then calculate the volatility of VeChain's crypto coin to predict their future moves. A crypto that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A crypto coin with relatively stable price changes has low volatility. A highly volatile crypto 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 VeChain's volatility:

Historical Volatility

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

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for VeChain's current market price. This means that the crypto will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on VeChain's to be redeemed at a future date.

Most traded cryptocurrencies are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or coin-specific or project-specific) risk. Unsystematic risk is the risk that events specific to VeChain project will adversely affect the coin's price. This type of risk can be diversified away by owning several different digital assets on different exchanges whose coin prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that VeChain's price will be affected by overall cryptocurrency 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 VeChain crypto'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.

Assuming the 90 days trading horizon the coefficient of variation of VeChain is 706.3. The daily returns are distributed with a variance of 36.44 and standard deviation of 6.04. The mean deviation of VeChain is currently at 4.18. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.

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