CALM investors hurt by serious losses
07 Dec, 201813 min read
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CAL-MAINE FOODS INC was among the worst performers on Friday. It fell by -1.93% to close at 43.66. It is currently trading -15% below it's 52 week high of 51.55.
CALM is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +6.25% for investors.
CALM has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 3 Mar, 2016 to 2 Oct, 2018. Over the last 2 years 11 months and 3 days, CALM underperformed the SP500 index on 47% days. Which indicates that on days CALM underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
CALM returned losses on 54% days in the last three months. During this time, it delivered on average -0.22% per day. It delivered it's worst daily return of -6.83%, during this period, on Monday, 1 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 21 Sep, 2018 and ended on 27 Sep, 2018. This bearish trend lost -5.19% of investor capital.
During the last year CALM had 5 profitable months and 7 loss making months. CALM returned profits in fewer months than SP500 index. CALM significantly outperformed SP500 index in Apr 2018, when it returned +12.47% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CALM 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 CALM and SP500 index significantly outperform during months when quarterly/annual results are announced.
Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt
CALM 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 fall in CALM's volatility from 2 Oct, 2018 to 19 Nov, 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 CALM 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 CALM 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 CALM. Therefore, SP500 must receive a lower allocation than CALM in your portfolio. SP500 index usually has shorter drawdown period than CALM.
Based on your interest in CALM you may find it interesting to know that LULU, TWTR and AMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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