How MIND C.T.I. Ltd. (NASDAQ: MNDO) can have an impact on the volatility of your portfolio

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If you are interested in MIND C.T.I. Ltd (NASDAQ: MNDO), 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 other type, which can not be diversified, is the volatility of the entire market. Each market share is exposed to this volatility, linked to the fact that stock prices are correlated in an efficient market. "Data-reactid =" 27 "> If you are interested in MIND CTI Ltd. (NASDAQ: MNDO) Then you might want to examine its beta (measure the volatility of the stock price) to understand the impact that the stock could have on your portfolio.Volumility is considered a measure of risk in the theory of modern finance.The volatility specific to a company, which corresponds to the price fluctuations of an individual stock, is held by at least 8 stocks, which reduces this type of risk on a portfolio, the other type can not be diversified volatility of the whole market: each share of the market is exposed to this volatility, which is linked the fact that stock prices are correlated in an efficient market.

Some stocks are more sensitive to market forces in general than others. Some investors use beta to measure the impact of market risk (volatility) on a given stock. We must keep in mind that Warren Buffett warned that "volatility is far from risk," but the beta remains a useful factor to consider. To make good use of it, you must first know that the beta of the market is one. 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 analysis of MIND C.T.I "data-reactid =" 29 "> Discover our latest analysis for MIND C.T.I

What does the MNDO beta value mean to investors?

Over the last five years, MIND C.T.I has a beta of 0.85. The fact that it is well below 1 indicates that stock price movements have not been historically very sensitive to overall market volatility. If history is a good guide, equity ownership should help you avoid that your portfolio is too sensitive to market volatility. 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 MIND C.T.I behaves in this regard, below.

NasdaqGM: MNDO Income Statement, March 14, 2019

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Does the size of MNDO influence the expected beta?

MIND C.T.I is a small company with a market capitalization of 46 million USD. Most companies of this size are not always actively traded. Very small businesses often have a low beta value because the price of their shares is not well correlated with market volatility. This could be due to the fact that the price reacts to company-specific events. Alternatively, the shares may not be actively traded.

What does this mean for you?

The potential benefit of owning low beta stocks, such as MIND C.T.I, is that your overall portfolio will not be too sensitive to global market movements. However, this can be a blessing or a curse, depending on what is happening in the wider market. The purpose of this article is to inform investors about beta values, but important corporate fundamentals such as the financial performance and financial health of MIND C.T.I should also be considered. I urge you to continue your research by examining the following:

  1. Future prospects: What do well-informed industry analysts predict for the future growth of MNDO? Check out our free research report on analyst consensus on MNDO's outlook.
  2. antecedents: Did MNDO always perform well 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 MNDO history for clarity.
  3. Other interesting actions: It should be checked how MNDO compares to other companies in terms of evaluation. 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 = "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.