Does Argo Group International Holdings, Ltd. (NYSE:ARGO) Have A High Beta?
Anyone researching Argo Group International Holdings, Ltd. (NYSE:ARGO) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market.
Some stocks are more sensitive to general market forces than others. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
Check out our latest analysis for Argo Group International Holdings
What we can learn from ARGO's beta value
Given this level of beta, if the future looks like the past, we could therefore consider it likely that the stock price will experience share price volatility that is roughly similar to the overall market. Beta is worth considering, but it's also important to consider whether Argo Group International Holdings is growing earnings and revenue. You can take a look for yourself, below.
How does ARGO's size impact its beta?
Argo Group International Holdings is a small cap stock with a market capitalisation of US$1.2b. Most companies this size are actively traded.
What this means for you:
Argo Group International Holdings has a beta value quite close to that of the overall market. That doesn't tell us much on its own, so it is probably worth considering whether the company is growing, if you're looking for stocks that will go up more than the overall market. In order to fully understand whether ARGO is a good investment for you, we also need to consider important company-specific fundamentals such as Argo Group International Holdings’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
Future Outlook: What are well-informed industry analysts predicting for ARGO’s future growth? Take a look at our free research report of analyst consensus for ARGO’s outlook.
Past Track Record: Has ARGO been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of ARGO's historicals for more clarity.
Other Interesting Stocks: It's worth checking to see how ARGO measures up against other companies on valuation. You could start with this free list of prospective options.
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