Does the share price of Alcanna Inc. (TSE: CLIQ) fall with the market?

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Anyone who researches Alcanna Inc. (TSE: CLIQ) may want to consider the historical volatility of the stock price. Modern finance theory views volatility as a measure of risk, and there are two main types of price volatility. The first category is company-specific volatility. This can be remedied by limiting your exposure to certain stocks. The second type is caused by the natural volatility of the markets as a whole. For example, certain macroeconomic events will affect (practically) all stocks in the market. "Data-reactid =" 27 "> Anyone looking at Alcanna Inc. (TSE: CLIQ) should consider the historical volatility of the stock price. Modern Finance In theory, volatility is a measure of risk, and there are two main types of price volatility : The first category is company-specific volatility. This can be remedied by limiting your exposure to a particular stock. Overall market volatility: For example, certain macroeconomic events (practically) affect all stocks in the market.

Some stocks are more sensitive to general market forces than others. Some investors use beta as a measure of how much a particular security is affected by market risk (volatility). While we should keep in mind that Warren Buffett has pointed out that "volatility is not synonymous with risk", beta is still a useful factor. To use it well, you first need to know that the overall market beta is one. Stocks with a beta of more than 1 are considered to be more volatile than the market, while stocks with a beta of less than 1 are either less volatile or have a low correlation to the market.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = " Check out our latest analysis for Alcanna "data-reactid =" 29 "> Check out our latest analysis for Alcanna

What the CLIQ beta says to investors

Looking at the past five years, Alcanna has a beta of 1.29. The fact that this is well above 1 shows that the stock's price movements have shown sensitivity to general market volatility. Based on this story, investors should be aware that Alcanna may rise sharply in times of greed, but sell in times of fear. The volatility of stock prices is worth considering, but most long-term investors consider the history of sales and earnings growth to be more important. Check out below how Alcanna does in this regard.

TSX: CLIQ Income Statement, January 5, 2020

Does the size of CLIQ affect the expected beta?

With a market capitalization of CA $ 157 million, Alcanna is a very small company by global comparison. Most investors should not be aware of this. It has a relatively high beta, suggesting that it is trading fairly actively for a company of its size. Because it takes less capital to move a small company’s stock price like this, a stock of this size is often more sensitive to market fluctuations when trading actively than comparable large companies.

What this means for you:

Beta only tells us that the Alcanna share price is sensitive to broader market movements. This could indicate that the company is a high-growth company or that it is strongly influenced by the mood due to its speculation. Alternatively, it could have operational leverage in its business model. Ultimately, beta is an interesting metric, but there is much more to learn. To understand whether CLIQ is a good investment for you, we also need to consider important company-specific basics, such as financial health and Alcanna's success story. I can only recommend that you dive deeper if you consider the following:

  1. Financial health: Are CLIQ's operations financially sustainable? Balance sheets can be difficult to analyze. That's why we did it for you. Find out here about our financial health examinations.
  2. Past track record: Has CLIQ held up well regardless of the ups and downs of the market? Go into more detail in the previous performance analysis and look at the free visual displays of the CLIQ histories to get more clarity.
  3. Other high performance stocks: Are there other stocks that offer better prospects with proven track records? Discover our free list of these great stocks here.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com, This article from Simply Wall St is general in nature. It 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 in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading."data-reactid =" 52 ">If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com. This article from Simply Wall St is general in nature. It 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 in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading.