ARES CAPITAL CORP delivered massive losses today. It returned -3.45% to close at 15.94. During the last week it returned -1.2% and saw a maximum drawdown of -2.45% before bouncing back.
Buy-and-Hold investors in ARCC experienced a maximum drawdown of -9.33% over the last three months. It returned -8.02% 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. The net profit from Short signals was +0.11%.
ARCC has been underperforming the SP500 index in recent time, after having outperformed till 7 Feb, 2017. Over the last 2 years 11 months and 9 days, ARCC underperformed the SP500 index on 48% days. Which indicates that on days ARCC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months ARCC was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +5.47%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -3.45%) was on Thursday, 13 Dec, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -2.94% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +7.3% to investors.
On monthly basis, ARCC delivered profits and losses in equal number of months. ARCC delivered profits less regularly than SP500 index. ARCC was also a less risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -6.46% compared to -7.28% returned by SP500 index in Oct 2018. ARCC had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -9.0%. It is interesting to note that both ARCC and SP500 index significantly outperform during months when quarterly/annual results are announced.
Average investors who try to do a lot of trading will only make their brokers rich.
-- Michael Jenson
ARCC is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ARCC's volatility from 27 Sep, 2018 to 10 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that ARCC has significant positive skewness in it's return distribution. This indicates that investors can expect ARCC to recover from drawdowns quickly. Which makes ARCC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Based on your interest in ARCC you may find it interesting to know that APRN has shown remarkable performance and deserves to be on every investors' watchlist.
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