Sound Financial Bancorp Stock Volatility
Sound Financial Bancorp owns Efficiency Ratio (i.e., Sharpe Ratio) of -0.13, which indicates the firm had a -0.13% return per unit of risk over the last 3 months. Sound Financial Bancorp exposes twenty-one different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please validate Sound Financial's Coefficient Of Variation of 2957.07, semi deviation of 0.6338, and Risk Adjusted Performance of 0.0234 to confirm the risk estimate we provide. Key indicators related to Sound Financial's volatility include:
300 Days Market Risk | Chance Of Distress | 300 Days Economic Sensitivity |
Sound Financial 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 Sound daily returns, and it is calculated using variance and standard deviation. We also use Sound's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Sound Financial volatility.
Sound |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Sound Financial 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 Sound Financial at lower prices. For example, an investor can purchase Sound 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 Sound Financial'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 against Sound Stock
| 0.49 | BY | Byline Bancorp Financial Report 25th of July 2024 | PairCorr |
| 0.43 | AX | Axos Financial Fiscal Year End 25th of July 2024 | PairCorr |
Sound Financial Market Sensitivity And Downside Risk
Sound Financial's beta coefficient measures the volatility of Sound 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 Sound stock's returns against your selected market. In other words, Sound Financial's beta of 0.1 provides an investor with an approximation of how much risk Sound Financial stock can potentially add to one of your existing portfolios. Sound Financial Bancorp has relatively low volatility with skewness of 0.43 and kurtosis of 3.74. You can indeed make money on Sound instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.
3 Months Beta |Analyze Sound Financial Bancorp Demand TrendCheck current 90 days Sound Financial correlation with market (NYSE Composite)Sound Beta |
Sound 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 | 13.27 |
It is essential to understand the difference between upside risk (as represented by Sound Financial's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Sound Financial's daily returns or price. Since the actual investment returns on holding a position in sound 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 Sound Financial.
Sound Financial Bancorp Stock Volatility Analysis
Volatility refers to the frequency at which Sound Financial stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Sound Financial's price changes. Investors will then calculate the volatility of Sound Financial'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 Sound Financial's volatility:
Historical Volatility
This type of stock volatility measures Sound Financial's fluctuations based on previous trends. It's commonly used to predict Sound Financial'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 Sound Financial'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 Sound Financial'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. Sound Financial Bancorp 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.
Sound Financial Projected Return Density Against Market
Given the investment horizon of 90 days Sound Financial has a beta of 0.1041 . This usually implies as returns on the market go up, Sound Financial average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Sound Financial Bancorp 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 Sound Financial or Banks 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 Sound Financial'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 Sound 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.
Sound Financial Bancorp has an alpha of 0.0136, implying that it can generate a 0.0136 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Sound Financial 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.Sound Financial Stock Risk Measures
Given the investment horizon of 90 days the coefficient of variation of Sound Financial is -765.51. The daily returns are distributed with a variance of 176.22 and standard deviation of 13.27. The mean deviation of Sound Financial Bancorp is currently at 3.47. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.63
α | Alpha over NYSE Composite | 0.01 | |
β | Beta against NYSE Composite | 0.10 | |
σ | Overall volatility | 13.27 | |
Ir | Information ratio | -0.02 |
Sound Financial Stock Return Volatility
Sound Financial historical daily return volatility represents how much of Sound Financial stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 13.2749% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6313% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Sound Financial Volatility
Volatility is a rate at which the price of Sound Financial 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 Sound Financial may increase or decrease. In other words, similar to Sound's beta indicator, it measures the risk of Sound Financial and helps estimate the fluctuations that may happen in a short period of time. So if prices of Sound Financial 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 | 377 K | 376 K | |
| Market Cap | 91.1 M | 52.3 M |
Sound Financial'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 Sound Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Sound Financial's price varies over time.
3 ways to utilize Sound Financial's volatility to invest better
Higher Sound Financial's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Sound Financial Bancorp 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. Sound Financial Bancorp 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 Sound Financial Bancorp investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Sound Financial'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 Sound Financial's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Sound Financial Investment Opportunity
Sound Financial Bancorp has a volatility of 13.27 and is 21.06 times more volatile than NYSE Composite. 96 percent of all equities and portfolios are less risky than Sound Financial. You can use Sound Financial Bancorp to protect your portfolios against small market fluctuations. The stock experiences a very speculative upward sentiment. Check odds of Sound Financial to be traded at $0.0 in 90 days.Significant diversification
The correlation between Sound Financial Bancorp and NYA is 0.08 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Sound Financial Bancorp and NYA in the same portfolio, assuming nothing else is changed.
Sound Financial Additional Risk Indicators
The analysis of Sound Financial'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 Sound Financial's investment and either accepting that risk or mitigating it. Along with some common measures of Sound Financial 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 | 0.0234 | |||
| Market Risk Adjusted Performance | 0.1761 | |||
| Mean Deviation | 0.4598 | |||
| Semi Deviation | 0.6338 | |||
| Downside Deviation | 1.05 | |||
| Coefficient Of Variation | 2957.07 | |||
| Standard Deviation | 0.8071 |
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.
Sound Financial 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 Sound Financial 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. Sound Financial'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, Sound Financial'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 Sound Financial Bancorp.
When determining whether Sound Financial Bancorp offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Sound Financial's 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 Sound Financial Bancorp Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Sound Financial Bancorp Stock: Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Sound Financial Bancorp. 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 labor statistics. Note that the Sound Financial Bancorp information on this page should be used as a complementary analysis to other Sound Financial's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Complementary Tools for Sound Stock analysis
When running Sound Financial's price analysis, check to measure Sound Financial'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 Sound Financial is operating at the current time. Most of Sound Financial's value examination focuses on studying past and present price action to predict the probability of Sound Financial's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Sound Financial's price. Additionally, you may evaluate how the addition of Sound Financial to your portfolios can decrease your overall portfolio volatility.
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Is Sound Financial'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 Sound Financial. If investors know Sound 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 Sound Financial 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 (0.64) | Dividend Share 0.76 | Earnings Share 2.33 | Revenue Per Share 14.648 | Quarterly Revenue Growth (0.17) |
The market value of Sound Financial Bancorp is measured differently than its book value, which is the value of Sound that is recorded on the company's balance sheet. Investors also form their own opinion of Sound Financial's value that differs from its market value or its book value, called intrinsic value, which is Sound Financial'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 Sound Financial's market value can be influenced by many factors that don't directly affect Sound Financial'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 Sound Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine if Sound Financial is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Sound Financial'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.