Wells Story

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WFC -- USA Stock  

USD 36.17  1.39  3.70%

Considering the 60-days investment horizon Wells Fargo is expected to generate 2.62 times more return on investment than the market. However, the company is 2.62 times more volatile than its market benchmark. It trades about 0.27 of its potential returns per unit of risk. The DOW is currently generating roughly 0.14 per unit of risk. As many old-fashioned traders are trying to avoid financial services space, it makes sense to go over Wells Fargo a little further and try to understand its current volatility patterns. We are going to analyze if the current expected returns justify Wells Fargo's volatility.
Published over a month ago
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Is Wells Fargo (NYSE:WFC) a good hedge for your existing portfolios?
The company has 289.72 B in debt with debt to equity (D/E) ratio of 8.26, demonstrating that Wells Fargo may be unable to create cash to meet all of its financial commitments.
Volatility is a rate at which the price of Wells Fargo 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 Wells Fargo may increase or decrease. In other words, similar to Wells's beta indicator, it measures the risk of Wells Fargo and helps estimate the fluctuations that may happen in a short period of time. So if prices of Wells Fargo 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.

How important is Wells Fargo's Liquidity

Wells Fargo financial leverage refers to using borrowed capital as a funding source to finance Wells Fargo ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Wells Fargo financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Wells Fargo's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Wells Fargo, but it might be worth checking our own buy vs. sell analysis

Wells Fargo Volatility Drivers

Wells Fargo unsystematic risk is unique to Wells Fargo and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Wells Fargo you can also buy US Bancorp. You can also mitigate this risk by investing in the banks?diversified sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Wells Fargo important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Wells Fargo income statement and balance sheet. Here are more details about Wells volatility.
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