Shore Stock Volatility

SHBI -  USA Stock  

USD 20.78  0.24  1.14%

Shore Bancshares appears to be very steady, given 4 months investment horizon. Shore Bancshares owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.18, which indicates the firm had 0.18% of return per unit of risk over the last 4 months. Our standpoint towards measuring 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 Shore Bancshares, which you can use to evaluate the future volatility of the company. Please review Shore Bancshares' Semi Deviation of 0.6996, risk adjusted performance of 0.1397, and Coefficient Of Variation of 615.09 to confirm if our risk estimates are consistent with your expectations.

Shore Volatility 

 
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Shore Bancshares 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 Shore daily returns, and it is calculated using variance and standard deviation. We also use Shore's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Shore Bancshares volatility.

720 Days Market Risk

Very steady

Chance of Distress

720 Days Economic Sensitivity

Follows the market closely
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Shore Bancshares 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 Shore Bancshares at lower prices. For example, an investor can purchase Shore 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 Shore Bancshares' 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.

Shore Bancshares Market Sensitivity And Downside Risk

Shore Bancshares' beta coefficient measures the volatility of Shore 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 Shore stock's returns against your selected market. In other words, Shore Bancshares's beta of 0.57 provides an investor with an approximation of how much risk Shore Bancshares stock can potentially add to one of your existing portfolios.
Let's try to break down what Shore's beta means in this case. As returns on the market increase, Shore Bancshares returns are expected to increase less than the market. However, during the bear market, the loss on holding Shore Bancshares will be expected to be smaller as well.
4 Months Beta |Analyze Shore Bancshares Demand Trend
Check current 90 days Shore Bancshares correlation with market (DOW)

Shore Beta

    
  0.57  
Shore 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

    
  1.21  
It is essential to understand the difference between upside risk (as represented by Shore Bancshares's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Shore Bancshares stock's daily returns or price. Since the actual investment returns on holding a position in Shore Bancshares 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 Shore Bancshares.

Shore Bancshares Stock Volatility Analysis

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

Historical Volatility

This type of stock volatility measures Shore Bancshares' fluctuations based on previous trends. It's commonly used to predict Shore Bancshares' 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 Shore Bancshares' 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 eighty-three. Shore Bancshares 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. View also all equity analysis or get more info about average price price transform indicator.

Shore Bancshares Projected Return Density Against Market

Given the investment horizon of 90 days Shore Bancshares has a beta of 0.575 . This usually implies as returns on the market go up, Shore Bancshares average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Shore Bancshares 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 Shore Bancshares or Financial Services 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 Shore Bancshares 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 Shore 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 0.1726, implying that it can generate a 0.17 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
Shore Bancshares' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Shore Bancshares 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.

Shore Bancshares 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 Shore Bancshares or Financial Services 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 Shore Bancshares 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 Shore 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.
Given the investment horizon of 90 days the coefficient of variation of Shore Bancshares is 541.93. The daily returns are distributed with a variance of 1.47 and standard deviation of 1.21. The mean deviation of Shore Bancshares is currently at 0.94. For similar time horizon, the selected benchmark (DOW) has volatility of 0.84
α
Alpha over DOW
0.17
β
Beta against DOW0.57
σ
Overall volatility
1.21
Ir
Information ratio 0.13

Shore Bancshares Stock Return Volatility

Shore Bancshares historical daily return volatility represents how much Shore Bancshares stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company inherits 1.2126% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 0.8206% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Shore Bancshares Volatility

Volatility is a rate at which the price of Shore Bancshares 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 Shore Bancshares may increase or decrease. In other words, similar to Shore's beta indicator, it measures the risk of Shore Bancshares and helps estimate the fluctuations that may happen in a short period of time. So if prices of Shore Bancshares 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 Capitalization158 M162.5 M
Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank that provides various commercial and consumer banking products and services to individuals, businesses, and other organizations. The company was founded in 1876 and is headquartered in Easton, Maryland. Shore Bancshares operates under BanksRegional classification in the United States and is traded on NASDAQ Exchange. It employs 287 people.

Shore Bancshares Investment Opportunity

Shore Bancshares has a volatility of 1.21 and is 1.48 times more volatile than DOW. 10  of all equities and portfolios are less risky than Shore Bancshares. Compared to the overall equity markets, volatility of historical daily returns of Shore Bancshares is lower than 10 () of all global equities and portfolios over the last 90 days. Use Shore Bancshares to protect your portfolios against small market fluctuations. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of Shore Bancshares to be traded at $20.16 in 90 days. . Let's try to break down what Shore's beta means in this case. As returns on the market increase, Shore Bancshares returns are expected to increase less than the market. However, during the bear market, the loss on holding Shore Bancshares will be expected to be smaller as well.

Very weak diversification

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

Shore Bancshares Additional Risk Indicators

The analysis of Shore Bancshares' 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 Shore Bancshares' investment and either accepting that risk or mitigating it. Along with some common measures of Shore Bancshares 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 Performance0.1397
Market Risk Adjusted Performance0.3372
Mean Deviation0.9452
Semi Deviation0.6996
Downside Deviation0.9469
Coefficient Of Variation615.09
Standard Deviation1.22
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.

Shore Bancshares 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 Shore Bancshares 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. Shore Bancshares' 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, Shore Bancshares' 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 Shore Bancshares.
Additionally, take a look at World Market Map. Note that the Shore Bancshares information on this page should be used as a complementary analysis to other Shore Bancshares' 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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Is Shore Bancshares' 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 Shore Bancshares. If investors know Shore 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 Shore Bancshares 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 Shore Bancshares is measured differently than its book value, which is the value of Shore that is recorded on the company's balance sheet. Investors also form their own opinion of Shore Bancshares' value that differs from its market value or its book value, called intrinsic value, which is Shore Bancshares' 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 Shore Bancshares' market value can be influenced by many factors that don't directly affect Shore Bancshares' 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 Shore Bancshares' value and its price as these two are different measures arrived at by different means. Investors typically determine Shore Bancshares value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Shore Bancshares' 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.