ARRIS INTERNATIONAL PLC

30.77 -0.21 (-0.68%) Buy

ARRS investors herd to book profits while the going is good

13 min read

ARRIS INTERNATIONAL PLC was among the worst performers on Friday. It lost -0.68% to close at 30.77. On a day when the overall market breadth was 35%, it closed higher than 11% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing ARRS]

Buy-and-Hold investors in ARRS experienced a maximum drawdown of -15.39% over the last three months. It returned +18.8% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +10.72%.

Trend

ARRS has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, ARRS underperformed the SP500 index on 51% days.

During the last three months ARRS was mostly profitable and delivered on average +0.3% per day. It's best return during this period (of +11.29%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -3.22%) was on Tuesday, 23 Oct, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 14 Sep, 2018. The bullish trend returned +2.83% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -12.03% of investor capital.

ARRS had 7 profitable and 5 loss making months over the last year. During the last year, ARRS underperformed SP500 index on monthly return basis. ARRS significantly outperformed SP500 index in Nov 2018, when it returned +24.25% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ARRS had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-- Norman Vincent Peale

ARRS 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 fall in ARRS's volatility from 24 Oct, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ARRS 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 ARRS. Therefore, SP500 must receive a lower allocation than ARRS in your portfolio. SP500 index usually has shorter drawdown period than ARRS.

On a general note (since you are interested in ARRS), two mid cap instruments that deserve special mention are LULU and ABMD. They have significantly outperformed the overall market.

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