AVALONBAY COMMUNITIES INC

186.6 +2.81 (+1.51%) Sell

AVB investors hold onto their investments as it marginally outperforms

13 min read

AVALONBAY COMMUNITIES INC ranked among the best performers on Thursday. It delivered +1.51% to close at 186.6. It is currently trading +21% above it's 52 week low of 153.9 and is down only -2% from it's 52 week high.

[Themes containing AVB]

Buy-and-Hold investors in AVB experienced a maximum drawdown of -6.7% over the last three months. It delivered +1.81% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.

Trend

AVB has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 19 Jan, 2016 to 27 Feb, 2018. Over the last 2 years 11 months and 9 days, AVB underperformed the SP500 index on 50% days. Which indicates that on days AVB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months AVB was mostly profitable and delivered on average +0.04% per day. It's best return during this period (of +2.32%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -2.88%) was on Monday, 22 Oct, 2018. The longest stort-term trends during this period were 3 profitable and losing days. The bullish trend (which returned +2.19%) started on 5 Oct, 2018 and went on till 9 Oct, 2018 while the bearish trend (which returned -4.68%) started on 10 Oct, 2018 and went on till 12 Oct, 2018.

During the last year AVB had 7 profitable months and 5 loss making months. AVB returned profits in fewer months than SP500 index. AVB significantly outperformed SP500 index in Nov 2018, when it returned +8.66% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AVB and SP500 index, both had periods of 6 consecutive profitable months.

"You will never be a greater risk-taker in the markets if you approach life with a completely different attitude.

AVB is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in AVB's volatility from 18 Sep, 2018 to 31 Oct, 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 AVB has significant positive skewness in it's return distribution. This indicates that investors can expect AVB to recover from drawdowns quickly. Which makes AVB a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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