19.47 -0.06 (-0.31%) Sell

ARLP investors disappointed by market underperformance

13 min read

ALLIANCE RESOURCE PARTNERS LP significantly underperformed today. It returned -0.31% to close at 19.47. During the last week it returned -0.05% and saw a maximum drawdown of -0.51% before bouncing back.

[Themes containing ARLP]

ARLP is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for ARLP's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +0.1%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to ARLP.


ARLP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, ARLP outperformed the SP500 index on 50% days. Which indicates that on days ARLP outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months ARLP delivered losses on 60% days. However, it still managed to end this period in a profit. It's best return during this period (of +2.9%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -3.4%) was on Tuesday, 30 Oct, 2018. There was initially a bullish trend during this period which started on 21 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +7.28% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -5.56% of investor capital.

On monthly basis, ARLP delivered profits and losses in equal number of months. ARLP delivered profits less regularly than SP500 index. ARLP significantly outperformed SP500 index in Jul 2018, when it returned +13.83% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ARLP had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both ARLP and SP500 index significantly outperform during months when quarterly/annual results are announced.

I would not pre-pay. I would invest instead and let the investments cover it.
-- Dave Ramsey

ARLP 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 ARLP's volatility from 9 Oct, 2018 to 30 Oct, 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 ARLP 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 ARLP. Therefore, SP500 must receive a lower allocation than ARLP in your portfolio. SP500 index usually has shorter drawdown period than ARLP.

Based on your interest in ARLP you may find it interesting to know that DLPH, AYTU and APRN have all shown remarkable performance and qualify to be on every investor's watchlist.

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