ABEV investors disappointed by market underperformance

AMBEV S.A. (Foreign) delivered massive losses on Friday. It returned -2.65% to close at 4.04. It is currently trading -45% below it's 52 week high of 7.39.

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Buy-and-Hold investors in ABEV experienced a maximum drawdown of -16.08% over the last three months. It returned -9.21% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.

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ABEV has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, ABEV underperformed the SP500 index on 46% days. Which indicates that on days ABEV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ABEV was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +4.13%) was on Monday, 8 Oct, 2018. While it's worst loss in the same period (of -5.61%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +5.08% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -7.13% of investor capital.

On monthly basis, ABEV delivered losses in more months over the last year, than profits. ABEV delivered profits less regularly than SP500 index. ABEV was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -20.54% compared to -7.28% returned by SP500 index in Oct 2018. ABEV had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -24.1%. It is interesting to note that both ABEV and SP500 index significantly outperform during months when quarterly/annual results are announced.

Too many people spend money they earned..to buy things they don't want..to impress people that they don't like.
-- Will Rogers

ABEV 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 ABEV's volatility from 20 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ABEV 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.

SP500 index has more chance of extreme outcomes than ABEV. Therefore, SP500 must receive a lower allocation than ABEV in your portfolio. SP500 index usually has shorter drawdown period than ABEV.

On a general note (since you are interested in ABEV), three large cap instruments that deserve special mention are CSCO, AMZN and V. They have all outperformed the market and must be closely watched for investment opportunities.