41.01 -1.21 (-2.96%) Buy

ACIA investors herd to book profits while the going is good

13 min read

ACACIA COMMUNICATIONS, INC. delivered massive losses on Friday. It returned -2.96% to close at 41.01. On a day when the overall market breadth was 35%, it closed higher than 71% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ACIA]

ACIA is currently in a up trend. Over the last three months Buy-and-Hold has been a better strategy (returning +4.88%) for ACIA's investors than trading long signals.


ACIA has been underperforming the SP500 index in recent time, after having outperformed till 6 Sep, 2016. Over the last 2 years 7 months and 1 days, ACIA outperformed the SP500 index on 50% days. Which indicates that on days ACIA outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months ACIA was mostly profitable and delivered on average +0.16% per day. It's best return during this period (of +22.67%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.4%) was on Thursday, 29 Nov, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 10 Oct, 2018. The trend delivered -12.41% losses to investors. This was followed by a bullish trend that started on 11 Oct, 2018 and ended on 17 Oct, 2018. This bullish trend delivered +8.71% to investors.

On monthly basis, ACIA delivered profits in more months over the last year, than losses. ACIA delivered profits less regularly than SP500 index. ACIA significantly outperformed SP500 index in Aug 2018, when it returned +26.85% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ACIA had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

If all the economists were laid end to end, they'd never reach a conclusion.
-- George Bernard Shaw

ACIA 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 ACIA's volatility from 25 Sep, 2018 to 2 Nov, 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 ACIA 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 ACIA. Therefore, SP500 must receive a lower allocation than ACIA in your portfolio. SP500 index usually has shorter drawdown period than ACIA.

On a general note (since you are interested in ACIA), AMD is a mid cap that deserves to be closely tracked for investment opportunities.

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