Anyone who is reviewing the CVD Equipment Company NYSE: CCV.U at https://www.webull.com/quote/nyse-ccv.u should recognise the share price ‘s historical uncertainty. Modern philosophy of finance considers uncertainty as a risk indicator and two major kinds of market volatility are current. Relevant business volatility is the first category. This can be resolved by restricting exposure to any single stock. The volatility of the whole market is the other form that cannot be diversified away. Both securities on the exchange are exposed to the fact that equity values in an effective market equate with such value.
Some securities are very closely imitating the market volatility, while others exhibit quiet, exaggerated or insignificant price fluctuations. Beta is a commonly used metric for calculating equity risk (volatility) sensitivity to market risk. It should be noted before we go, that Warren Buffett points out.
Beta value for CVV
In his letter to shareholders in 2014 it claimed that ‘volatility is not very synonymous with risk.’ Beta is the first thing to remember is the beta of the whole market. A beta stock is either less volatile than the economy, or more volatile, but it is not related to the overall price. Compared with the beta of over one, the stock continues in the long run to shift closely to the economy, albeit with larger price shifts.
NYSE: CCV.U Equipment has a beta of 1.14 for the past five years. The fact that its price fluctuations are far above 1 suggests a vulnerability to market uncertainty in general. On the basis of this history, investors should understand that in times of greed, CVD Equipment will possibly grow strongly, but sell in times of terror. Many would argue that beta is beneficial when assessing positions, but critical indicators like income and benefit are more important.
Effect of size
CVD Equipment is a small enterprise. It has a US$ 25 m market capitalization, which means most investors still have it under the radar. The share price of a very limited business needs less capital. The excess uncertainty indicated by this beta value can therefore be clarified.
Since CVD Equipment has a very high beta, it must be considered that the wider market mood is so highly affected. For eg, its growth stock is high or its business model has a great deal of operative leverage. We will need to consider key business fundamentals like the financial stability and efficiency record of CVD Equipment to be able to truly appreciate whether NYSE: CCV.U is a suitable investment for you. You can check how to use NASDAQ TotalView before using it.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.