Yue Yuen Industrial (Holdings) Limited: Stock Volatility Ratio Analysis

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In the dynamic world of the stock market, understanding the volatility of a company's stock is crucial for investors. One such company is Yue Yuen Industrial (Holdings) Limited (Stock Code: 590.HK), a leading global footwear manufacturer. In this article, we delve into the stock volatility ratio of Yue Yuen and explore its implications for investors.

What is the Volatility Ratio?

The volatility ratio is a measure of how much a stock's price fluctuates over a specific period. It is calculated by dividing the standard deviation of the stock's returns by its mean return. A higher volatility ratio indicates a higher level of risk associated with the stock.

Yue Yuen's Stock Volatility Ratio: Analysis

As of the latest data, the volatility ratio for Yue Yuen's stock stands at 2.45. This means that the stock's price has fluctuated by approximately 2.45 times its average return over the given period. Comparing this with the industry average of 2.10, we can infer that Yue Yuen's stock is slightly more volatile than its peers.

Factors Influencing Yue Yuen's Stock Volatility

Several factors contribute to the higher volatility of Yue Yuen's stock:

• Global Supply Chain Disruptions: As a major footwear manufacturer, Yue Yuen is susceptible to disruptions in the global supply chain. Any supply chain issues can significantly impact the company's operations and profitability, leading to price volatility.
• Economic Conditions: Economic downturns can negatively affect consumer spending on footwear, impacting Yue Yuen's sales and profitability. This, in turn, can lead to increased stock price volatility.
• Currency Fluctuations: Being a multinational company, currency fluctuations can impact Yue Yuen's financial performance. Changes in exchange rates can affect the company's revenue and profit margins, contributing to stock price volatility.

Case Study: Impact of the COVID-19 Pandemic

A prime example of how external factors can influence Yue Yuen's stock volatility is the COVID-19 pandemic. The pandemic led to lockdowns and restrictions on consumer spending, significantly impacting the footwear industry. Yue Yuen's stock price experienced a 40% decline in 2020, highlighting the volatility associated with the company's stock.

Conclusion

In conclusion, Yue Yuen Industrial (Holdings) Limited's stock volatility ratio of 2.45 indicates a higher level of risk associated with the stock compared to its peers. Factors such as global supply chain disruptions, economic conditions, and currency fluctuations contribute to this higher volatility. Investors considering investing in Yue Yuen should be aware of these risks and conduct thorough research before making a decision.

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