12.44 -0.34 (-2.74%) Sell

Don't even consider investing in AR now, it is a risky investment

13 min read

ANTERO RESOURCES CORP is a falling knife that can bleed you if you catch it on Tuesday. It returned -2.74% to close at 12.44. On a day when the overall market breadth was 35%, it closed higher than 83% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing AR]

AR showed a strong down trend over the last 3 months. During this period AR returned -32.87% and saw a maximum drawdown of -37.61%. There was a short signal during this period which returned +32.87%.


AR has been underperforming the SP500 index in recent time, after having outperformed till 8 Feb, 2016. Over the last 2 years 11 months and 7 days, AR underperformed the SP500 index on 50% days. Which indicates that on days AR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months AR was mostly loss making and delivered on average -0.6% per day. It's best return during this period (of +8.22%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -7.4%) was on Wednesday, 26 Sep, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 19 Sep, 2018. The bullish trend returned +7.43% to investors. This was followed by a bearish trend that started on 6 Nov, 2018 and ended on 9 Nov, 2018. This bearish trend lost -8.45% of investor capital.

On monthly basis, AR delivered losses in more months over the last year, than profits. AR delivered profits less regularly than SP500 index. AR was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -17.37% compared to -7.28% returned by SP500 index in Oct 2018. AR had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -50.27%. It is interesting to note that both AR and SP500 index significantly outperform during months when quarterly/annual results are announced.

"You have venture capitalists. We view them as experts who also help finance your company and give directions and also some pretty candid discussions about what you have to do better.

AR 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 AR's volatility from 17 Sep, 2018 to 14 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AR has significant negative skewness in it's return distribution. This indicates that AR is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in AR you may find it interesting to know that ICPT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to ICPT or sufficiently diversifying your portfolio.

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