Don't invest in BYD now, it is a risky investment
11 Dec, 201813 min read
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BOYD GAMING CORP significantly underperformed on Tuesday. It delivered -2.46% to close at 23.41. It is currently trading -41% below it's 52 week high of 39.91.
BYD showed a strong bearish trend over the last 3 months. During this period BYD delivered -30.7% and saw a maximum drawdown of -34.71%. There was a short signal during this period which returned +30.7%.
BYD has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 3 Mar, 2017 to 1 Feb, 2018. Over the last 2 years 11 months and 7 days, BYD underperformed the SP500 index on 49% days. Which indicates that on days BYD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months BYD was mostly loss making and delivered on average -0.53% per day. It's best return during this period (of +6.98%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -12.1%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 18 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -17.13% of investor capital.
The last 12 months saw BYD's investors making profits in 4 months and incurring losses in 8 months. BYD was less consistent in delivering monthly returs than SP500 index. BYD was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -20.74% compared to -7.28% returned by SP500 index in Oct 2018. BYD had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -42.52%. It is interesting to note that both BYD and SP500 index significantly outperform during months when quarterly/annual results are announced.
Fortune sides with him who dares.
-- Virgil
BYD is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in BYD's volatility from 28 Sep, 2018 to 29 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 BYD 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 BYD. Therefore, SP500 must receive a lower allocation than BYD in your portfolio. SP500 index usually has shorter drawdown period than BYD.
On a general note (since you are interested in BYD), if you are an investor in OPNT, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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