Want to participate in a short research study? Help us shape the future of investment tools and get a chance to win a $ 250 gift card!Anyone looking for Alphageo (India) Limited (NSE: ALPHAGEO) might want to take into account the historical volatility of the share price. Volatility is considered a measure of risk in modern financial theory. Investors may think that volatility is divided into two main categories. The first type is company-specific volatility. Investors use uncorrelated equity diversification to reduce this type of price volatility across the entire portfolio. The second type is caused by the natural volatility of the markets as a whole. For example, certain macroeconomic events will affect (virtually) all securities in the market. Some are more sensitive to market forces than others. Beta is a widely used measure of a stock's exposure to market risk (volatility). Before proceeding, it should be noted that Warren Buffett pointed out in his 2014 letter to shareholders that "volatility is far from being risky". That said, beta can still be quite useful. The first thing to understand about beta is that market beta is one of them. A stock with a beta greater than one is more sensitive to market movements than stocks with a beta below one. Discover our latest analyzes for Alphageo (India)

What does the ALPHAGEO beta value mean for investors?

Given that its beta is 0.84, we can assume that the price of the Alphageo stock (India) was not strongly affected by the increased volatility of the market (over the last 5 years). If history is a good guide, equity ownership should help you avoid that your portfolio is too sensitive to market volatility. Many would argue that beta is useful for sizing positions, but that fundamental measures such as income and profits are more important in general. You can see the income and revenues for Alphageo (India) in the image below.

NSEI: ALPHAGEO Profit and Loss Account 12 February 19More

Could the size of ALPHAGEO be more volatile?

Alphageo (India) is a relatively small company with a market capitalization of £ 2.7 billion. Most companies of this size are not always actively traded. It is not uncommon for very small businesses to have a low beta value, especially if only small volumes of shares are traded. Even when they are traded more actively, the stock price is often more sensitive to company-specific developments than to overall market volatility.

What does this mean for you?

Alphageo (India) generally does not have much market sensitivity in general. This could be for various reasons. Typically, small businesses have a low beta if their stock price tends to fluctuate a lot due to specific developments. Alternatively, a strong dividend payer could move less than the market because investors value it for its revenue stream. The purpose of this article is to inform investors about beta values, but it is also important to consider important company-specific fundamentals, such as the financial performance and financial health of Alphageo (India). I strongly recommend that you dive deeper by considering the following points:

  1. Future prospects: What do well-informed industry analysts predict for ALPHAGEO's future growth? Watch our free analyst consensus research report for the prospects of ALPHAGEO.
  2. antecedents: Has ALPHAGEO always been successful regardless of the ups and downs of the market? Go into more detail in past performance analysis and take a look at free visual representations of ALPHAGEO's history to clarify more.
  3. Other interesting actions: It is useful to check how ALPHAGEO compares with other companies in terms of valuation. You could start with that free list of possible options.

To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Please note that our analysis does not take into account the latest price sensitive business announcements. The author is an independent contributor and, at the time of publication, he did not hold any position on the mentioned actions. For errors that need to be corrected, please contact the publisher at the address editorial-team@simplywallst.com.