47.75 -0.75 (-1.57%) Sell

ATVI is a falling knife, continues to bleed every investor trying to catch it

13 min read

ACTIVISION BLIZZARD, INC. has destroyed investor wealth on Friday. It returned -1.57% to close at 47.75. On a day when the overall market breadth was 35%, it closed higher than 4% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ATVI]

ATVI showed a strong down trend over the last 3 months. During this period ATVI returned -39.47% and saw a maximum drawdown of -44.21%. There were 3 short signals during this period that returned a cumulative of +23.56% to investors.


ATVI has been underperforming the SP500 index in recent time, after having outperformed till 13 Jul, 2018. Over the last 2 years 11 months and 10 days, ATVI underperformed the SP500 index on 46% days. Which indicates that on days ATVI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ATVI was mostly loss making and delivered on average -0.74% per day. It's best return during this period (of +5.51%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -12.39%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 26 Sep, 2018 and went on till 2 Oct, 2018. The bullish trend returned +3.51% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -22.26% of investor capital.

On monthly basis, ATVI delivered losses in more months over the last year, than profits. ATVI delivered profits less regularly than SP500 index. ATVI was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -27.76% compared to -7.28% returned by SP500 index in Oct 2018. ATVI had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ATVI and SP500 index significantly outperform during months when quarterly/annual results are announced.

A real entrepreneur is somebody who has no safety net underneath them.
-- Henry Kravis

ATVI 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 ATVI's volatility from 28 Sep, 2018 to 6 Dec, 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 ATVI 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.

Investors trading in ATVI derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in ATVI), SBOT has performed really well and deserves to be closely tracked for investment opportunities.

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