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Beta is the hedge ratio of an investment with respect to the stock market. For example, to hedge out the market-risk of a stock with a market beta of 2.0, an investor would short $2,000 in the stock market for every $1,000 invested in the stock. Thus insured, movements of the overall stock market no longer influence the combined position on ...
For example, if the market is making a big move 20% higher, a stock with a beta of 1.5 will tend to trade up 30%. In this way, an investor can maximize gains in a bullish market by picking up ...
Beta allows for a good comparison between an individual stock and a market-tracking index fund, but it doesn’t offer a complete portrait of a stock’s risk. Instead, it’s a look at its level ...
The Acertus Market Sentiment Indicator (AMSI) incorporates five variables (in descending order of weight in the indicator): Price/Earnings Ratio (a measure of stock market valuations); price momentum (a measure of market psychology); Realized Volatility (a measure of recent historical risk); High Yield Bond Returns (a measure of credit risk ...
The following terms are in everyday use in financial regions, such as commercial business and the management of large organisations such as corporations. Noun phrases [ edit ]
Most investors seek out investments that will give them the biggest gains they can get. High beta stocks are a favorite of many investors who aren't afraid of taking big risks in order to earn jaw ...
The relationship between stock returns to profit to determine the extent of the response that occurs to as the Earnings Response Coefficient (ERC). Some studies reveal there are four factors that affect Earnings Response Coefficient (ERC), namely : beta, capital structure, persistence and growth. [citation needed]
Investors, whether beginner or seasoned professionals, all have a threshold for risk. Some prefer to play it safe and favor a low-risk investment plan while others are more advantageous with a ...