AVIS BUDGET GROUP, INC.

25.49 -0.2 (-0.78%) Sell

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

13 min read

AVIS BUDGET GROUP, INC. delivered massive losses today. It returned -0.78% to close at 25.49. It's recent 5 day performance has been -1.42%, -2.8%, +2.21%, -6.92% and +1.15%.

[Themes containing CAR]

CAR is currently in a down trend. The current bearish signal has generated a profit of +23.84% for investors in the last three months.

Trend

CAR has been underperforming the SP500 index in recent time, after having outperformed till 10 Apr, 2018. Over the last 2 years 11 months and 9 days, CAR underperformed the SP500 index on 46% days. Which indicates that on days CAR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

CAR returned losses on 55% days in the last three months. During this time, it delivered on average -0.37% per day. It delivered it's worst daily return of -11.0%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +2.58% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -18.53% of investor capital.

On monthly basis, CAR delivered profits in more months over the last year, than losses. CAR delivered profits less regularly than SP500 index. CAR was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -21.09% compared to -7.28% returned by SP500 index in Oct 2018. CAR had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both CAR and SP500 index significantly outperform during months when quarterly/annual results are announced.

Financial security and independence are like a three-legged stool resting on savings, insurance and investments.
-- Brian Tracy

CAR 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 CAR's volatility from 1 Oct, 2018 to 7 Nov, 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 CAR has significant positive skewness in it's return distribution. This indicates that investors can expect CAR to recover from drawdowns quickly. Which makes CAR a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in CAR you may find it interesting to know that FND, PRPH and QRVO have all performed similar to CAR and qualify as alternative investment candidates that must be evaluated for diversification.

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