Allot Communications Stock Volatility
| ALLT Stock | USD 2.08 0.04 1.89% |
Allot Communications appears to be very risky, given 3 months investment horizon. Allot Communications secures Sharpe Ratio (or Efficiency) of 0.0849, which signifies that the company had a 0.0849% return per unit of risk over the last 3 months. We have found thirty technical indicators for Allot Communications, which you can use to evaluate the volatility of the firm. Please makes use of Allot Communications' Downside Deviation of 2.72, risk adjusted performance of 0.0726, and Mean Deviation of 2.44 to double-check if our risk estimates are consistent with your expectations. Key indicators related to Allot Communications' volatility include:
30 Days Market Risk | Chance Of Distress | 30 Days Economic Sensitivity |
Allot Communications 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 Allot daily returns, and it is calculated using variance and standard deviation. We also use Allot's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Allot Communications volatility.
Allot |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Allot Communications 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 Allot Communications at lower prices. For example, an investor can purchase Allot 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 Allot Communications' 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 Allot Stock
Moving against Allot Stock
| 0.73 | ZS | Zscaler Financial Report 6th of June 2024 | PairCorr |
| 0.73 | FIVN | Five9 Inc | PairCorr |
| 0.66 | EVCM | EverCommerce Financial Report 14th of May 2024 | PairCorr |
| 0.66 | EVTC | Evertec | PairCorr |
| 0.6 | S | SentinelOne Financial Report 6th of June 2024 | PairCorr |
| 0.5 | CETXP | Cemtrex Pref | PairCorr |
| 0.49 | VRSN | VeriSign | PairCorr |
Allot Communications Market Sensitivity And Downside Risk
Allot Communications' beta coefficient measures the volatility of Allot 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 Allot stock's returns against your selected market. In other words, Allot Communications's beta of 1.24 provides an investor with an approximation of how much risk Allot Communications stock can potentially add to one of your existing portfolios. Allot Communications currently demonstrates below-average downside deviation. It has Information Ratio of 0.08 and Jensen Alpha of 0.25. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Allot Communications' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Allot Communications' 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 Allot Communications Demand TrendCheck current 90 days Allot Communications correlation with market (NYSE Composite)Allot Beta |
Allot 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 | 3.18 |
It is essential to understand the difference between upside risk (as represented by Allot Communications's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Allot Communications' daily returns or price. Since the actual investment returns on holding a position in allot 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 Allot Communications.
Using Allot Put Option to Manage Risk
Put options written on Allot Communications grant holders of the option the right to sell a specified amount of Allot Communications 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 Allot Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Allot Communications' 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 Allot Communications will be realized, the loss incurred will be offset by the profits made with the option trade.
Allot Communications' PUT expiring on 2024-05-17
Profit |
| Allot Communications Price At Expiration |
Allot Communications Stock Volatility Analysis
Volatility refers to the frequency at which Allot Communications stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Allot Communications' price changes. Investors will then calculate the volatility of Allot Communications' 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 Allot Communications' volatility:
Historical Volatility
This type of stock volatility measures Allot Communications' fluctuations based on previous trends. It's commonly used to predict Allot Communications' 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 Allot Communications' 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 Allot Communications' 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. Allot Communications 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.
Allot Communications Projected Return Density Against Market
Given the investment horizon of 90 days the stock has the beta coefficient of 1.2416 . This suggests as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Allot Communications 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 Allot Communications or Software 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 Allot Communications' 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 Allot 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.
Allot Communications has an alpha of 0.2539, implying that it can generate a 0.25 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives an Allot Communications 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.Allot Communications Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Allot Communications is 1178.37. The daily returns are distributed with a variance of 10.1 and standard deviation of 3.18. The mean deviation of Allot Communications is currently at 2.38. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.64
α | Alpha over NYSE Composite | 0.25 | |
β | Beta against NYSE Composite | 1.24 | |
σ | Overall volatility | 3.18 | |
Ir | Information ratio | 0.08 |
Allot Communications Stock Return Volatility
Allot Communications historical daily return volatility represents how much of Allot Communications stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 3.1784% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6216% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Allot Communications Volatility
Volatility is a rate at which the price of Allot Communications 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 Allot Communications may increase or decrease. In other words, similar to Allot's beta indicator, it measures the risk of Allot Communications and helps estimate the fluctuations that may happen in a short period of time. So if prices of Allot Communications 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 Next Year | ||
| Selling And Marketing Expenses | 43.9 M | 35.9 M | |
| Market Cap | 62.6 M | 59.4 M |
Allot Communications' 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 Allot Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Allot Communications' price varies over time.
3 ways to utilize Allot Communications' volatility to invest better
Higher Allot Communications' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Allot Communications 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. Allot Communications 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 Allot Communications investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Allot Communications' 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 Allot Communications' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Allot Communications Investment Opportunity
Allot Communications has a volatility of 3.18 and is 5.13 times more volatile than NYSE Composite. 28 percent of all equities and portfolios are less risky than Allot Communications. You can use Allot Communications to protect your portfolios against small market fluctuations. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of Allot Communications to be traded at $2.02 in 90 days.Modest diversification
The correlation between Allot Communications and NYA is 0.25 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Allot Communications and NYA in the same portfolio, assuming nothing else is changed.
Allot Communications Additional Risk Indicators
The analysis of Allot Communications' 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 Allot Communications' investment and either accepting that risk or mitigating it. Along with some common measures of Allot Communications 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.
| Risk Adjusted Performance | 0.0726 | |||
| Market Risk Adjusted Performance | 0.2596 | |||
| Mean Deviation | 2.44 | |||
| Semi Deviation | 2.53 | |||
| Downside Deviation | 2.72 | |||
| Coefficient Of Variation | 995.95 | |||
| Standard Deviation | 3.19 |
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.
Allot Communications 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 Allot Communications 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. Allot Communications' 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, Allot Communications' 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 Allot Communications.
When determining whether Allot Communications is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Allot Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Allot Communications Stock. Highlighted below are key reports to facilitate an investment decision about Allot Communications Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Allot Communications. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis. For more information on how to buy Allot Stock please use our How to Invest in Allot Communications guide.You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Complementary Tools for Allot Stock analysis
When running Allot Communications' price analysis, check to measure Allot Communications' 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 Allot Communications is operating at the current time. Most of Allot Communications' value examination focuses on studying past and present price action to predict the probability of Allot Communications' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Allot Communications' price. Additionally, you may evaluate how the addition of Allot Communications to your portfolios can decrease your overall portfolio volatility.
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |
Is Allot Communications' 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 Allot Communications. If investors know Allot 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 Allot Communications listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (1.66) | Revenue Per Share 2.457 | Quarterly Revenue Growth (0.26) | Return On Assets (0.23) | Return On Equity (0.83) |
The market value of Allot Communications is measured differently than its book value, which is the value of Allot that is recorded on the company's balance sheet. Investors also form their own opinion of Allot Communications' value that differs from its market value or its book value, called intrinsic value, which is Allot Communications' 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 Allot Communications' market value can be influenced by many factors that don't directly affect Allot Communications' 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 Allot Communications' value and its price as these two are different measures arrived at by different means. Investors typically determine if Allot Communications is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Allot Communications' 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.