Profit booking on the minds of CC investors as it performed better than the broader market
12 Dec, 201813 min read
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CHEMOURS CO delivered stellar performance on Wednesday. It gained +5.17% to close at 26.65. On a day when the overall market breadth was 35%, it closed higher than 85% of the market. In comparison, the benchmark SP500 index closed today at +0.54%.
CC is currently in a down trend. The current bearish signal has generated a profit of +33.09% for investors in the last three months.
CC has been underperforming the SP500 index in recent time, after having outperformed till 27 Oct, 2017. Over the last 2 years 11 months and 8 days, CC outperformed the SP500 index on 52% days.
CC returned losses on 61% days in the last three months. During this time, it delivered on average -0.6% per day. It delivered it's worst daily return of -9.5%, during this period, on Tuesday, 9 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -5.99% losses to investors. This was followed by a bullish trend that started on 10 Oct, 2018 and ended on 16 Oct, 2018. This bullish trend delivered +4.67% to investors.
CC had 4 profitable and 8 loss making months over the last year. During the last year, CC underperformed SP500 index on monthly return basis. CC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.45% compared to -7.28% returned by SP500 index in Oct 2018. CC 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 -50.96%. It is interesting to note that both CC and SP500 index significantly outperform during months when quarterly/annual results are announced.
"The thing I have discovered about working with personal finance is that the good news is that it is not rocket science. Personal finance is about 80 percent behavior. It is only about 20 percent head knowledge.
CC 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 CC's volatility from 27 Sep, 2018 to 2 Nov, 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 CC 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 CC derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than CC. Therefore, SP500 must receive a lower allocation than CC in your portfolio. SP500 index usually has shorter drawdown period than CC.
On a general note (since you are interested in CC), V is a large cap that deserves to be closely tracked for investment opportunities.
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