PALO ALTO, Calif. /eNewsChannels/ — SmartStops announced today the launch of the SmartStops Risk Barometer Index(TM), or SRBI(TM). The SRBI is an easy to use metric that helps investors quickly gauge the relative level and direction of risk posed by a specific group of equities such as a particular market or sector.
Derived from the SmartStops individual equity short term risk signal which identifies equities as being in a normal or above normal risk state on any given day, the SRBI compares the current risk state ratio for a group of equities to the group’s 100 average. Unlike the VIX which uses volatility as a proxy for risk and rises when equities experience big moves in either a positive or negative direction, the SRBI leverages the SmartStop Above Normal Risk State which focuses only on abnormal price movements to the down side.
An SRBI greater than 1 indicates that the number of equities in the group experiencing above normal risk is higher than the average over the last 100 trading days.
An SRBI below 1 indicates that the number of equities in the group experiencing above normal risk is lower than the average over the last 100 trading days.
The SRBI can be used in conjunction with traditional market risk indicators such as the VIX to help investors gain visibility and better manage their risk exposure.
“Investors make purchase decisions based on risk/reward analysis. Unfortunately, risk does not remain constant through time,” explains Chris Conway, SmartStops’ Director of Product Management. “The SRBI can help investors quickly gauge a market or sector’s risk profile relative to its recent history, allowing for more informed and timely decisions. We expect the SRBI to be particularly helpful in strategies employing sector or market rotation.”
Financial Advisor Akber Zaidi welcomes this new risk metric. “Managing risk is fundamental to successful investing. I am always on the lookout for innovative and effective ways to quantify and track risk exposure and I look forward to adding the SmartStops Risk Barometer Index to my risk management toolbox.”
Currently SmartStops is publishing SRBI numbers for the S&P 500 and the Dow 30 as well as for ten market sectors including Basic Materials, Consumer Goods, Consumer Services, Energy, Financials, Healthcare, Industrials, Technology, Telecommunications and Utilities.
To learn more about the SRBI and to view today’s SRBI values, visit http://www.SmartStops.net/PublicPages/MarketRiskBarometer.aspx .
SmartStops is dedicated to helping investors of all levels be more aware of changes in their risk exposure enabling timely decisions that protect assets, improve returns and provide peace of mind. SmartStops’ portfolio monitoring and risk alert services start at just $9.95 per month.
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