How does Logic Instrument S.A. (EPA: ALLOG) affect the volatility of your portfolio?

0
8
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Anyone looking for a logical instrument S.A. (EPA: ALLOG) might want to take into account the historical volatility of the share price. Volatility is considered a measure of risk in modern financial theory. Investors may think that volatility is divided into two main categories. The first category is company-specific volatility. This can be handled by limiting your exposure to a particular title. 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 =" 27 "> Anyone doing research on Logic Instrument SA (EPA: ALLOG) might want to consider the historical volatility of the stock price.Volumility is Investors may think that volatility is divided into two main categories: company-specific volatility, which can be addressed by limiting your exposure to a particular stock, caused by natural market volatility, for example, certain macroeconomic events will affect (virtually) all securities on the market. 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 = " Discover our latest analysis for Logic Instrument "data-reactid =" 29 "> Check out our latest Logic Instrument analysis

What does the ALLOG beta value mean to investors?

With a beta of 0.91 (which is pretty close to 1), Logic Instrument's share price has always been as volatile as the broader market. Using history as a guide, it can be assumed that the stock price will likely be influenced by market volatility, but it is unlikely to be particularly sensitive to this trend. Many would argue that beta is useful for sizing positions, but that fundamental measures such as income and profits are more important in general. The revenue and earnings of Logic Instrument are illustrated below.

ENXTPA: ALLOG Income Statement as of March 14, 2019

More

Could the size of ALLOG be more volatile?

Logic Instrument is a rather small company. Its market capitalization reaches € 6.0 million, which means that it is probably under the radar of most investors. It does not take much money to actually move the stock price of a company as small as this one. This makes its beta value somewhat unusual so close to the global market.

What does this mean for you?

Logic Instrument has a beta value quite close to that of the global market. It does not tell us much about it. It is therefore probably worth asking if the company is growing, if you are looking for stocks that will rise more than the market in general. To fully understand if ALLOG is a good investment for you, we also need to consider important business fundamentals, such as the financial health and performance performance of Logic Instrument. I urge you to continue your research by examining the following:

  1. Financial health: Are ALLOG activities financially viable? Balance sheets can be difficult to analyze, which is why we have done it for you. Check out our financial health check here.
  2. antecedents: Has ALLOG always been successful regardless of the ups and downs of the market? Go into more detail in past performance reviews and take a look at the free visual representations of ALLOG history for clarity.
  3. Other performing stocks: Are there other stocks offering better prospects with proven track records? Explore our free list of these large stocks here.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Our goal is to provide you with a long-term research analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive business announcements or qualitative information.

If you notice an error that can be corrected, please contact the publisher at editorial-team@simplywallst.com. This article from Simply Wall St is of a general nature. This is not a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. Simply Wall St has no position on the actions mentioned. Thanks for the reading.

"data-reactid =" 52 "> Our goal is to provide you with a long-term, targeted research analysis based on fundamental data.Please note that our analysis may not take into account the latest announcements of price sensitive companies or qualitative information.

If you notice an error that needs to be corrected, please contact the publisher at editorial-team@simplywallst.com. This article from Simply Wall St is of a general nature. This is not a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. Simply Wall St has no position on the actions mentioned. Thanks for the reading.