Build-A-Bear Stock Volatility

BBW -  USA Stock  

USD 19.99  0.87  4.55%

We consider Build-A-Bear Workshop not too volatile. Build-A-Bear Workshop secures Sharpe Ratio (or Efficiency) of 0.0187, which signifies that the company had 0.0187% of return per unit of risk over the last 3 months. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Build-A-Bear Workshop, which you can use to evaluate the future volatility of the firm. Please confirm Build-A-Bear Workshop Risk Adjusted Performance of 0.0511, mean deviation of 3.67, and Downside Deviation of 5.46 to double-check if the risk estimate we provide is consistent with the expected return of 0.094%.
  
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Build-A-Bear Workshop 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 Build-A-Bear daily returns, and it is calculated using variance and standard deviation. We also use Build-A-Bear's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Build-A-Bear Workshop volatility.

30 Days Market Risk

Not too volatile

Chance of Distress

Below Average

30 Days Economic Sensitivity

Hyperactively responds to market trends
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Build-A-Bear Workshop 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 Build-A-Bear Workshop at lower prices. For example, an investor can purchase Build-A-Bear 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 Build-A-Bear Workshop'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 Build-A-Bear Workshop

0.72BLMNBloomin BrandsPairCorr
0.62CHSChicos Fas Financial Report 14th of June 2022 PairCorr

Moving against Build-A-Bear Workshop

-0.56AGRIAgriforce Growing SystemsPairCorr
-0.53BKRBaker Hughes APairCorr

Build-A-Bear Workshop Market Sensitivity And Downside Risk

Build-A-Bear Workshop's beta coefficient measures the volatility of Build-A-Bear stock compared to the systematic risk of the entire stock 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 Build-A-Bear stock's returns against your selected market. In other words, Build-A-Bear Workshop's beta of 2.15 provides an investor with an approximation of how much risk Build-A-Bear Workshop stock can potentially add to one of your existing portfolios.
Let's try to break down what Build-A-Bear's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Build-A-Bear Workshop will likely underperform.
3 Months Beta |Analyze Build-A-Bear Workshop Demand Trend
Check current 90 days Build-A-Bear Workshop correlation with market (DOW)

Build-A-Bear Beta

    
  2.15  
Build-A-Bear standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity 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

    
  5.03  
It is essential to understand the difference between upside risk (as represented by Build-A-Bear Workshop's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Build-A-Bear Workshop stock's daily returns or price. Since the actual investment returns on holding a position in Build-A-Bear Workshop 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 Build-A-Bear Workshop.

Build-A-Bear Workshop Implied Volatility

    
  75.75  
Build-A-Bear Workshop's implied volatility exposes the market's sentiment of Build-A-Bear Workshop stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Build-A-Bear Workshop's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Build-A-Bear Workshop stock will not fluctuate a lot when Build-A-Bear Workshop's options are near their expiration.

Build-A-Bear Workshop Stock Volatility Analysis

Volatility refers to the frequency at which Build-A-Bear Workshop stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Build-A-Bear Workshop's price changes. Investors will then calculate the volatility of Build-A-Bear Workshop'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 Build-A-Bear Workshop's volatility:

Historical Volatility

This type of stock volatility measures Build-A-Bear Workshop's fluctuations based on previous trends. It's commonly used to predict Build-A-Bear Workshop'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 Build-A-Bear Workshop's current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Build-A-Bear Workshop 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.
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Build-A-Bear Workshop Projected Return Density Against Market

Considering the 90-day investment horizon the stock has the beta coefficient of 2.1526 suggesting as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Build-A-Bear Workshop will likely underperform.
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 Build-A-Bear Workshop or Consumer Cyclical 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 Build-A-Bear Workshop stock'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 Build-A-Bear 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.
The company has an alpha of 0.1536, implying that it can generate a 0.15 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
Build-A-Bear Workshop's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Build-A-Bear Workshop stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Company's Stock Price Volatility?

Several factors can influence a company's stock 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.

Build-A-Bear Workshop Stock Risk Measures

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 Build-A-Bear Workshop or Consumer Cyclical 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 Build-A-Bear Workshop stock'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 Build-A-Bear 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.
Considering the 90-day investment horizon the coefficient of variation of Build-A-Bear Workshop is 5345.3. The daily returns are distributed with a variance of 25.27 and standard deviation of 5.03. The mean deviation of Build-A-Bear Workshop is currently at 3.63. For similar time horizon, the selected benchmark (DOW) has volatility of 1.37
α
Alpha over DOW
0.15
β
Beta against DOW2.15
σ
Overall volatility
5.03
Ir
Information ratio 0.0302

Build-A-Bear Workshop Stock Return Volatility

Build-A-Bear Workshop historical daily return volatility represents how much Build-A-Bear Workshop stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The venture has volatility of 5.0268% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.3427% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Build-A-Bear Workshop Volatility

Volatility is a rate at which the price of Build-A-Bear Workshop 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 Build-A-Bear Workshop may increase or decrease. In other words, similar to Build-A-Bear's beta indicator, it measures the risk of Build-A-Bear Workshop and helps estimate the fluctuations that may happen in a short period of time. So if prices of Build-A-Bear Workshop 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.
Last ReportedProjected for 2022
Market Capitalization283 M263.6 M
Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products. As of January 29, 2022, it operated 346 stores, including 305 stores in the United States and Canada and 41 stores in the United Kingdom and Ireland, as well as 72 franchised stores internationally. Build-A-Bear Workshop operates under Specialty Retail classification in the United States and is traded on New York Stock Exchange. It employs 1000 people.

Nearest Build-A-Bear long CALL Option Payoff at Expiration

Build-A-Bear Workshop's implied volatility is one of the determining factors in the pricing options written on Build-A-Bear Workshop. Implied volatility approximates the future value of Build-A-Bear Workshopusing the option's current value. Options with high implied volatility have higher premiums and can be used to hedge the downside of investing in Build-A-Bear Workshop over a specific time period.
View All Build-A-Bear options
2022-06-17 CALL at $1.25 is a CALL option contract on Build-A-Bear Workshop's common stock with a strick price of 1.25 expiring on 2022-06-17. The contract was last traded on 2022-02-28 at 16:46:22 for $19.23 and, as of today, has 20 days remaining before the expiration. The option is currently trading at a bid price of $17.9, and an ask price of $19.9. The implied volatility as of the 28th of May is 729.8183.
 Profit 
Share
      Build-A-Bear Workshop Price At Expiration 

Build-A-Bear Workshop Investment Opportunity

Build-A-Bear Workshop has a volatility of 5.03 and is 3.75 times more volatile than DOW. 43  of all equities and portfolios are less risky than Build-A-Bear Workshop. Compared to the overall equity markets, volatility of historical daily returns of Build-A-Bear Workshop is lower than 43 () of all global equities and portfolios over the last 90 days. Use Build-A-Bear Workshop to enhance returns of your portfolios. The stock experiences a very speculative upward sentiment. Check odds of Build-A-Bear Workshop to be traded at $24.99 in 90 days. . Let's try to break down what Build-A-Bear's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Build-A-Bear Workshop will likely underperform.

Very weak diversification

The correlation between Build-A-Bear Workshop and DJI is Very weak diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Build-A-Bear Workshop and DJI in the same portfolio, assuming nothing else is changed.

Build-A-Bear Workshop Additional Risk Indicators

The analysis of Build-A-Bear Workshop'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 Build-A-Bear Workshop's investment and either accepting that risk or mitigating it. Along with some common measures of Build-A-Bear Workshop stock 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 Performance0.0511
Market Risk Adjusted Performance0.0801
Mean Deviation3.67
Semi Deviation5.35
Downside Deviation5.46
Coefficient Of Variation3129.26
Standard Deviation5.04
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Build-A-Bear Workshop 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.
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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 Build-A-Bear Workshop 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. Build-A-Bear Workshop'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, Build-A-Bear Workshop'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 Build-A-Bear Workshop.
Continue to Trending Equities. Note that the Build-A-Bear Workshop information on this page should be used as a complementary analysis to other Build-A-Bear Workshop's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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Is Build-A-Bear Workshop's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Build-A-Bear Workshop. If investors know Build-A-Bear will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Build-A-Bear Workshop listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Build-A-Bear Workshop is measured differently than its book value, which is the value of Build-A-Bear that is recorded on the company's balance sheet. Investors also form their own opinion of Build-A-Bear Workshop's value that differs from its market value or its book value, called intrinsic value, which is Build-A-Bear Workshop's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Build-A-Bear Workshop's market value can be influenced by many factors that don't directly affect Build-A-Bear Workshop's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Build-A-Bear Workshop's value and its price as these two are different measures arrived at by different means. Investors typically determine Build-A-Bear Workshop value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Build-A-Bear Workshop's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.