42.0 -1.35 (-3.2%) Buy

ACC investors re-evaluating their investment strategy

13 min read

AMERICAN CAMPUS COMMUNITIES INC was among the worst performers on Monday. It delivered -3.2% to close at 42.0. On a day when the overall market breadth was 34%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ACC]

Buy-and-Hold investors in ACC experienced a maximum drawdown of -7.63% over the last three months. It delivered -0.85% during this flat trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals.


ACC has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 1 Aug, 2016 to 1 Feb, 2018. Over the last 2 years 11 months and 10 days, ACC underperformed the SP500 index on 46% days. Which indicates that on days ACC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ACC delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.5%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -3.2%) was on Monday, 17 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +4.7%) started on 2 Nov, 2018 and went on till 7 Nov, 2018 while the bearish trend (which returned -5.42%) started on 9 Oct, 2018 and went on till 12 Oct, 2018.

The last 12 months saw ACC's investors making profits in 6 months and incurring losses in 6 months. ACC was less consistent in delivering monthly returs than SP500 index. ACC significantly outperformed SP500 index in Nov 2018, when it returned +10.93% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ACC had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.

ACC is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ACC's volatility from 18 Sep, 2018 to 24 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 ACC has significant positive skewness in it's return distribution. This indicates that investors can expect ACC to recover from drawdowns quickly. Which makes ACC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ACC), two instruments that have been extremely volatile in recent times are VIPS and OPNT. Investors in these instruments should consider reducing their exposure (to VIPS and OPNT) and diversifying their portfolios.

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