Encore Wire Stock Volatility

WIRE Stock  USD 278.69  1.75  0.63%   
Encore Wire appears to be very steady, given 3 months investment horizon. Encore Wire secures Sharpe Ratio (or Efficiency) of 0.17, which denotes the company had a 0.17% return per unit of standard deviation over the last 3 months. We have found thirty technical indicators for Encore Wire, which you can use to evaluate the volatility of the firm. Please utilize Encore Wire's Semi Deviation of 1.07, mean deviation of 1.37, and Downside Deviation of 1.48 to check if our risk estimates are consistent with your expectations. Key indicators related to Encore Wire's volatility include:
720 Days Market Risk
Chance Of Distress
720 Days Economic Sensitivity
Encore Wire 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 Encore daily returns, and it is calculated using variance and standard deviation. We also use Encore's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Encore Wire volatility.
  

ESG Sustainability

While most ESG disclosures are voluntary, Encore Wire's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Encore Wire's managers and investors.
Environmental
Governance
Social
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Encore Wire 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 Encore Wire at lower prices. For example, an investor can purchase Encore 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 Encore Wire'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.

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Encore Wire Market Sensitivity And Downside Risk

Encore Wire's beta coefficient measures the volatility of Encore 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 Encore stock's returns against your selected market. In other words, Encore Wire's beta of 0.43 provides an investor with an approximation of how much risk Encore Wire stock can potentially add to one of your existing portfolios. Encore Wire has relatively low volatility with skewness of 2.09 and kurtosis of 11.15. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Encore Wire'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 Encore Wire'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 financial instruments as prices fall.
3 Months Beta |Analyze Encore Wire Demand Trend
Check current 90 days Encore Wire correlation with market (NYSE Composite)

Encore Beta

    
  0.43  
Encore 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

    
  2.15  
It is essential to understand the difference between upside risk (as represented by Encore Wire's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Encore Wire's daily returns or price. Since the actual investment returns on holding a position in encore 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 Encore Wire.

Using Encore Put Option to Manage Risk

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

Encore Wire's PUT expiring on 2024-06-21

   Profit   
       Encore Wire Price At Expiration  

Current Encore Wire Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2024-06-21 PUT at $280.0-0.540.0623252024-06-210.5 - 5.32.65View
Put
2024-06-21 PUT at $270.0-0.07880.02121852024-06-210.2 - 0.30.25View
View All Encore Wire Options

Encore Wire Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Encore Wire's fluctuations based on previous trends. It's commonly used to predict Encore Wire'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 Encore Wire'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 Encore Wire'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. Encore Wire 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.

Encore Wire Projected Return Density Against Market

Given the investment horizon of 90 days Encore Wire has a beta of 0.4298 . This entails as returns on the market go up, Encore Wire average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Encore Wire 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 Encore Wire or Electrical Equipment 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 Encore Wire'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 Encore 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.
Encore Wire has an alpha of 0.3784, implying that it can generate a 0.38 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
Encore Wire's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how encore 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 an Encore Wire 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.

Encore Wire Stock Risk Measures

Given the investment horizon of 90 days the coefficient of variation of Encore Wire is 604.09. The daily returns are distributed with a variance of 4.6 and standard deviation of 2.15. The mean deviation of Encore Wire is currently at 1.34. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.58
α
Alpha over NYSE Composite
0.38
β
Beta against NYSE Composite0.43
σ
Overall volatility
2.15
Ir
Information ratio 0.17

Encore Wire Stock Return Volatility

Encore Wire historical daily return volatility represents how much of Encore Wire stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 2.1451% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.5853% volatility on return distribution over the 90 days horizon.
 Performance 
       Timeline  

About Encore Wire Volatility

Volatility is a rate at which the price of Encore Wire 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 Encore Wire may increase or decrease. In other words, similar to Encore's beta indicator, it measures the risk of Encore Wire and helps estimate the fluctuations that may happen in a short period of time. So if prices of Encore Wire 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 Next Year
Selling And Marketing Expenses115.2 M76 M
Market Cap691.4 M726 M
Encore Wire's 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 Encore Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Encore Wire's price varies over time.

3 ways to utilize Encore Wire's volatility to invest better

Higher Encore Wire's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Encore Wire 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. Encore Wire 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 Encore Wire investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in Encore Wire's 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 Encore Wire's 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.

Encore Wire Investment Opportunity

Encore Wire has a volatility of 2.15 and is 3.64 times more volatile than NYSE Composite. Compared to the overall equity markets, volatility of historical daily returns of Encore Wire is lower than 19 percent of all global equities and portfolios over the last 90 days. You can use Encore Wire to enhance the returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of Encore Wire to be traded at $306.56 in 90 days.

Average diversification

The correlation between Encore Wire and NYA is 0.12 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Encore Wire and NYA in the same portfolio, assuming nothing else is changed.

Encore Wire Additional Risk Indicators

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

Encore Wire 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 Encore Wire 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. Encore Wire'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, Encore Wire'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 Encore Wire.
When determining whether Encore Wire is a strong investment it is important to analyze Encore Wire's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Encore Wire's future performance. For an informed investment choice regarding Encore Stock, refer to the following important reports:
Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Encore Wire. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in metropolitan statistical area.
For information on how to trade Encore Stock refer to our How to Trade Encore Stock guide.
You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.

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When running Encore Wire's price analysis, check to measure Encore Wire'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 Encore Wire is operating at the current time. Most of Encore Wire's value examination focuses on studying past and present price action to predict the probability of Encore Wire's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Encore Wire's price. Additionally, you may evaluate how the addition of Encore Wire to your portfolios can decrease your overall portfolio volatility.
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Is Encore Wire'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 Encore Wire. If investors know Encore 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 Encore Wire 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
(0.40)
Dividend Share
0.08
Earnings Share
19.03
Revenue Per Share
155.987
Quarterly Revenue Growth
(0.04)
The market value of Encore Wire is measured differently than its book value, which is the value of Encore that is recorded on the company's balance sheet. Investors also form their own opinion of Encore Wire's value that differs from its market value or its book value, called intrinsic value, which is Encore Wire'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 Encore Wire's market value can be influenced by many factors that don't directly affect Encore Wire'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 Encore Wire's value and its price as these two are different measures arrived at by different means. Investors typically determine if Encore Wire is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Encore Wire'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.