Williams Stock Story

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WSM
 Stock
  

USD 112.81  1.86  1.68%   

By Ellen Johnson
Macroaxis Story
Lets try to summarize the odds of Williams Sonoma to fully recover from the new pull down as its shares went up 9.02%. Williams Sonoma current daily volatility is 3.83 percent, with a beta of 1.65 and an alpha of -0.2 over DOW. While some of us are getting more passionate about stable market, it makes sense to summarize Williams-Sonoma in greater detail to make a better estimate of its volatility. We will analyze why it could be a much better year for Williams Sonoma shareholders.
Published over a month ago
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Williams-Sonoma Current Investor Sentiment

Investor biases related to Williams Sonoma's public news can be used to forecast risks associated with investment in Williams. The trend in average sentiment can be used to explain how an investor holding Williams can time the market purely based on public headlines and social activities around Williams-Sonoma. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Williams Sonoma's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Williams Sonoma's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Williams Sonoma's news discussions. The higher the estimate score, the more favorable is the investor's outlook on Williams Sonoma.

Williams Sonoma Maximum Pain Price across 2022-07-15 Option Contracts

Williams Sonoma's options can also be used to analyze investors' bias and current market sentiment in the context of behavioral finance. For example, Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of Williams Sonoma close to the expiration of its current option contract to expire worthlessly. According to most research, about 35% of options are not executed, with roughly 50% traded out before expiration. So, Max pain occurs when market makers reach a net favorable position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthlessly. Please continue to view the detailed analysis of Williams Sonoma's options.
Is Williams Sonoma (NYSE:WSM) way too risky for millennials?
Williams-Sonoma runs under Consumer Cyclical sector within Specialty Retail industry. The entity has 1.28 B in debt with debt to equity (D/E) ratio of 0.77, which is OK given its current industry classification. The firm has a current ratio of 1.28, demonstrating that it may not have the ability to pay its financial commitments when the payables are due. Debt can assist Williams Sonoma until it has trouble settling it off, either with new capital or with free cash flow. So, Williams Sonoma's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Williams-Sonoma sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Williams to invest in growth at high rates of return. When we think about Williams Sonoma's use of debt, we should always consider it together with cash and equity.
Investing in Williams Sonoma, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Williams Sonoma along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Williams Sonoma's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Williams Sonoma in the context of predictive analytics.
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Naive
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19 Analysts
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as Williams Sonoma. Your research has to be compared to or analyzed against Williams Sonoma's peers to derive any actionable benefits. When done correctly, Williams Sonoma's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Williams-Sonoma.

How important is Williams Sonoma's Liquidity

Williams Sonoma financial leverage refers to using borrowed capital as a funding source to finance Williams-Sonoma ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Williams Sonoma 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 Williams Sonoma'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 Williams Sonoma, but it might be worth checking our own buy vs. sell analysis

Williams Sonoma Correlation with Peers

Investors in Williams can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Williams-Sonoma. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Williams Sonoma and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Williams is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of Williams for more details

Another Deeper Perspective

Williams-Sonoma shows Sharpe Ratio of -0.0612, which attests that the company had -0.0612% of return per unit of risk over the last 3 months. Macroaxis standpoint towards determining the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Williams-Sonoma exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check out Williams-Sonoma mean deviation of 2.91, and Market Risk Adjusted Performance of (0.21) to validate the risk estimate we provide.
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0.10.49-0.10.02
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0.10.210.110.61
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0.490.210.190.39
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-0.10.110.19-0.17
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0.020.610.39-0.17
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Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Are Williams Sonoma technical ratios showing a reversion?

The jensen alpha is down to -0.2 as of today. Williams-Sonoma exhibits very low volatility with skewness of -0.99 and kurtosis of 1.55. However, we advise investors to further study Williams-Sonoma technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Williams Sonoma's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Williams Sonoma's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Williams Sonoma Implied Volatility

Williams Sonoma's implied volatility exposes the market's sentiment of Williams-Sonoma stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Williams Sonoma's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Williams Sonoma stock will not fluctuate a lot when Williams Sonoma's options are near their expiration.

Our Final Takeaway

While few other entities in the specialty retail industry are either recovering or due for a correction, Williams Sonoma may not be performing as strong as the other in terms of long-term growth potentials. While some stakeholders may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Williams Sonoma.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Williams-Sonoma. Please refer to our Terms of Use for any information regarding our disclosure principles.

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