From the first table and figure, below, I can see that EW has higher return with similar volatility compared to the S&P500. By comparison, ISRG (another stock in the same sector) has offered a higher return, but at a higher volatility. A trader must decide whether the potential for higher return is worth the additional volatility.
Another chart Wolfram Alpha provides is a scatter plot of daily returns comparing EW and the S&P. This plot and the associated table tells me that EW has a higher return, moderate beta, and decent alpha. I would rather own this stock than the S&P 500 index because it has offered greater return with similar volatility. I also like the low correlation with the S&P because it suggests that EW has held up during periods when the S&P dropped.
Wolfram also provides a projection of possible future equity curves for the stock based on a sample of log-normal random walks using historical parameters. It isn't a prediction though. Quite the opposite in fact.
It illustrates that there are a range of future outcomes (shown in the table below). For instance, the 95% range for 1-year returns are -22.7% to +154.3%. I like using this tool because it forces me to acknowledge that the future is uncertain and a successful speculator must have a plan that can handle any of these outcomes (and more). If the stock goes down what will you do? If it goes up what will you do? My approach is, generally, to scale into trades that move in the direction I want and use a trailing stop as my exit plan. I also use guppy chart signals to scale back a position if it looks toppy.
"The best investors do not target return; they focus first on risk, and only then decide whether the projected return justifies taking each particular risk." - Seth Klarman
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