<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If you are interested in Insecticides (India) Limited (NSE: INSECTICID), you may want to review its beta (measure of stock price volatility) to understand the impact the stock might have on your portfolio. Volatility is considered a measure of risk in modern financial theory. Investors may think that volatility is divided into two main categories. First, we have company-specific volatility, which is the price movement of a particular security. Holding at least 8 stocks can reduce this type of risk in a portfolio. The second type is caused by the natural volatility of the markets as a whole. For example, certain macroeconomic events will affect (virtually) all market shares. "Data-reactid =" 28 "> If you are interested in Insecticides (India) Limited (NSE: INSECTICID), you can consider its beta (measuring the volatility of stock prices) in order to understand the impact that the stock may have on your portfolio Volatility is considered a measure of risk in the theory of modern finance Investors may think that volatility is divided into two main categories: having a company-specific volatility, which corresponds to price fluctuations The second is due to the natural volatility of the markets, as a whole, as some macroeconomic events. impact (virtually) on all stocks in the market.
Some stocks are more sensitive to market forces in general than others. Beta is a widely used measure of a stock's exposure to market risk (volatility). Before proceeding, it should be noted that Warren Buffett pointed out in his 2014 letter to shareholders that "volatility is far from being risky". That said, beta can still be quite useful. The first thing to understand about beta is that market beta is one of them. A stock whose beta is less than one is less volatile than the market, is more volatile but not correlated to the market in general. In comparison, a stock with a beta greater than 1 tends to move in the same direction as the market in the long run, but with larger price changes.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Check out our latest insecticide tests (India) "data-reactid =" 30 "> See our latest analysis for insecticides (India)
What does the INSECTICID beta value mean for investors?
Given that its beta is 0.90, we can assume that the price of the Insecticides action (India) has not been strongly affected by the increased volatility of the market (over the last 5 years). This means that – if history is a guide – the purchase of the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, although sure). Stock price volatility is worth considering, but most long-term investors believe the story of earnings growth and earnings growth is more important. Take a look at how Insecticides (India) behaves in this regard, below.
NSEI: INSECTICID Export Profit and Loss Account 11 February 19
How does the size of INSECTICID impact on its beta?
With a market capitalization of 12 ₹, Insecticides (India) is a very small company by world standards. It is very likely that it is unknown to most investors. It is not uncommon for very small businesses to have a low beta value, especially if only small volumes of shares are traded. Even when they are traded more actively, the stock price is often more sensitive to company-specific developments than to overall market volatility.
What does this mean for you?
Insecticides (India) are generally not very sensitive to the market in general. This could be for various reasons. Typically, small businesses have a low beta if their stock price tends to fluctuate a lot due to specific developments. Alternatively, a strong dividend payer could move less than the market because investors value it for its revenue stream. In order to fully understand if INSECTICID is a good investment for you, we also need to consider important fundamentals of a company, such as the financial performance and financial health of Insecticides (India). I urge you to continue your research by examining the following:
- Future prospects: What do well-informed industry analysts predict for INSECTICID's future growth? Take a look at our free research report on analyst consensus regarding INSECTICID's outlook.
- antecedents: Has INSECTICID always performed independently of the ups and downs of the market? Go into more detail in the analysis of past performance and take a look at the free visual representations of INSECTICID histories for clarity.
- Other interesting actions: It is worth checking how INSECTICID compares to other companies in terms of valuation. You can start with this free list of potential options.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Note that our analysis does not take into account the latest price sensitive business announcements.
The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at the address email@example.com.
"data-reactid =" 53 "> To help readers understand the short-term volatility of the financial market, we aim to provide you with a long-term research analysis based solely on fundamental data. account of the latest price sensitive business announcements.
The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at firstname.lastname@example.org.