WMB investors looking to preserve capital
13 Dec, 201813 min read
Share with friends 
WILLIAMS COMPANIES INC has destroyed investor wealth on Thursday. It returned -1.36% to close at 23.86. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.
WMB is currently in a down trend. The current bearish signal has generated a profit of +13.88% for investors in the last three months.
WMB has been underperforming the SP500 index in recent time, after having outperformed till 21 Sep, 2016. Over the last 2 years 11 months and 9 days, WMB underperformed the SP500 index on 50% days. Which indicates that on days WMB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
WMB returned losses on 56% days in the last three months. During this time, it delivered on average -0.25% per day. It delivered it's best daily return of +5.84%, during this period, on Thursday, 1 Nov, 2018. There was initially a bearish trend during this period which started on 22 Oct, 2018 and went on till 29 Oct, 2018. The trend delivered -10.58% losses to investors. This was followed by a bullish trend that started on 14 Nov, 2018 and ended on 19 Nov, 2018. This bullish trend delivered +4.1% to investors.
On monthly basis, WMB delivered profits and losses in equal number of months. WMB delivered profits less regularly than SP500 index. WMB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.04% compared to -7.28% returned by SP500 index in Oct 2018. WMB had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both WMB and SP500 index significantly outperform during months when quarterly/annual results are announced.
"I grew up in Finance.
WMB is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WMB's volatility from 9 Oct, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that WMB has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
Investors trading in WMB derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than WMB. Therefore, SP500 must receive a lower allocation than WMB in your portfolio. SP500 index usually has shorter drawdown period than WMB.
Based on your interest in WMB you may find it interesting to know that AMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.
If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute