Dropbox (Germany) Volatility
| 1Q5 Stock | 22.20 0.12 0.54% |
Dropbox secures Sharpe Ratio (or Efficiency) of -0.14, which denotes the company had a -0.14% return per unit of risk over the last 3 months. Dropbox exposes twenty-one different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please confirm Dropbox's Standard Deviation of 2.86, mean deviation of 1.45, and Variance of 8.16 to check the risk estimate we provide. Key indicators related to Dropbox's volatility include:
720 Days Market Risk | Chance Of Distress | 720 Days Economic Sensitivity |
Dropbox Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Dropbox daily returns, and it is calculated using variance and standard deviation. We also use Dropbox's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Dropbox volatility.
Dropbox |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Dropbox can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Dropbox at lower prices. For example, an investor can purchase Dropbox stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Dropbox's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving together with Dropbox Stock
Moving against Dropbox Stock
| 0.79 | DBPE | Xtrackers LevDAX | PairCorr |
| 0.59 | RZC | CAICA Inc | PairCorr |
| 0.49 | PTX | Palantir Technologies | PairCorr |
| 0.42 | NJPA | Net 1 Ueps | PairCorr |
Dropbox Market Sensitivity And Downside Risk
Dropbox's beta coefficient measures the volatility of Dropbox stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Dropbox stock's returns against your selected market. In other words, Dropbox's beta of 0.71 provides an investor with an approximation of how much risk Dropbox stock can potentially add to one of your existing portfolios. Dropbox exhibits very low volatility with skewness of -4.34 and kurtosis of 28.18. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Dropbox's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Dropbox's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Dropbox Demand TrendCheck current 90 days Dropbox correlation with market (NYSE Composite)Dropbox Beta |
Dropbox standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 2.92 |
It is essential to understand the difference between upside risk (as represented by Dropbox's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Dropbox's daily returns or price. Since the actual investment returns on holding a position in dropbox stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Dropbox.
Dropbox Stock Volatility Analysis
Volatility refers to the frequency at which Dropbox stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Dropbox's price changes. Investors will then calculate the volatility of Dropbox's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Dropbox's volatility:
Historical Volatility
This type of stock volatility measures Dropbox's fluctuations based on previous trends. It's commonly used to predict Dropbox's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Dropbox's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Dropbox's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Dropbox Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Dropbox Projected Return Density Against Market
Assuming the 90 days horizon Dropbox has a beta of 0.7053 . This suggests as returns on the market go up, Dropbox average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Dropbox will be expected to be much smaller as well.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Dropbox or Technology sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Dropbox's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Dropbox stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Dropbox has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the NYSE Composite. Predicted Return Density |
| Returns |
What Drives a Dropbox Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Dropbox Stock Risk Measures
Assuming the 90 days horizon the coefficient of variation of Dropbox is -689.86. The daily returns are distributed with a variance of 8.53 and standard deviation of 2.92. The mean deviation of Dropbox is currently at 1.5. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.62
α | Alpha over NYSE Composite | -0.47 | |
β | Beta against NYSE Composite | 0.71 | |
σ | Overall volatility | 2.92 | |
Ir | Information ratio | -0.17 |
Dropbox Stock Return Volatility
Dropbox historical daily return volatility represents how much of Dropbox stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company shows 2.9203% volatility of returns over 90 . By contrast, NYSE Composite accepts 0.6294% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Dropbox Volatility
Volatility is a rate at which the price of Dropbox or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Dropbox may increase or decrease. In other words, similar to Dropbox's beta indicator, it measures the risk of Dropbox and helps estimate the fluctuations that may happen in a short period of time. So if prices of Dropbox fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.3 ways to utilize Dropbox's volatility to invest better
Higher Dropbox's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Dropbox stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Dropbox stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Dropbox investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Dropbox's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Dropbox's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Dropbox Investment Opportunity
Dropbox has a volatility of 2.92 and is 4.63 times more volatile than NYSE Composite. Compared to the overall equity markets, volatility of historical daily returns of Dropbox is lower than 25 percent of all global equities and portfolios over the last 90 days. You can use Dropbox to enhance the returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of Dropbox to be traded at 24.42 in 90 days.Average diversification
The correlation between Dropbox and NYA is 0.15 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Dropbox and NYA in the same portfolio, assuming nothing else is changed.
Dropbox Additional Risk Indicators
The analysis of Dropbox's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Dropbox's investment and either accepting that risk or mitigating it. Along with some common measures of Dropbox stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | (0.08) | |||
| Market Risk Adjusted Performance | (0.57) | |||
| Mean Deviation | 1.45 | |||
| Coefficient Of Variation | (715.35) | |||
| Standard Deviation | 2.86 | |||
| Variance | 8.16 | |||
| Information Ratio | (0.17) |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Dropbox Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
| GM vs. Dropbox | ||
| Bank of America vs. Dropbox | ||
| Ford vs. Dropbox | ||
| Alphabet vs. Dropbox | ||
| SentinelOne vs. Dropbox | ||
| Dupont De vs. Dropbox | ||
| Microsoft vs. Dropbox |
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Dropbox as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Dropbox's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Dropbox's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Dropbox.
When determining whether Dropbox offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Dropbox's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Dropbox Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Dropbox Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Dropbox. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in board of governors. For more detail on how to invest in Dropbox Stock please use our How to Invest in Dropbox guide.You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Complementary Tools for Dropbox Stock analysis
When running Dropbox's price analysis, check to measure Dropbox's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Dropbox is operating at the current time. Most of Dropbox's value examination focuses on studying past and present price action to predict the probability of Dropbox's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Dropbox's price. Additionally, you may evaluate how the addition of Dropbox to your portfolios can decrease your overall portfolio volatility.
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |