BIOGEN INC.

316.73 -9.67 (-3.05%) Sell

Stop-loss on the minds of BIIB investors as it destroyed investor wealth

13 min read

BIOGEN INC. ranked among the worst performers today. It lost -3.05% to close at 316.73. It's recent 5 day performance has been +1.23%, -2.85%, -0.46%, +2.18% and -1.69%.

[Themes containing BIIB]

BIIB is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for BIIB's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -6.91%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to BIIB.

Trend

BIIB has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, BIIB underperformed the SP500 index on 49% days. Which indicates that on days BIIB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

BIIB returned losses on 51% days in the last three months. During this time, it delivered on average -0.1% per day. It delivered it's worst daily return of -4.46%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 24 Sep, 2018. The bullish trend returned +3.72% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 22 Oct, 2018. This bearish trend lost -6.97% of investor capital.

BIIB had 6 profitable and 6 loss making months over the last year. During the last year, BIIB underperformed SP500 index on monthly return basis. BIIB was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -16.91% compared to -7.28% returned by SP500 index in Oct 2018. BIIB 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 BIIB and SP500 index significantly outperform during months when quarterly/annual results are announced.

Don't always trust what you see. In a bull market even a duck looks like a swan.
-- Vijay Kedia

BIIB 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 BIIB's volatility from 11 Sep, 2018 to 29 Oct, 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 BIIB 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 BIIB derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in BIIB), if you are an investor in IMTE, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.

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