11.67 -0.02 (-0.17%) Sell

Don't invest in CCJ now, it is a volatile investment

13 min read

CAMECO CORP (Foreign) was among the worst performers on Tuesday. It lost -0.17% to close at 11.67. It is currently trading +36% above it's 52 week low of 8.53 and is down only -6% from it's 52 week high.

[Themes containing CCJ]

CCJ showed a strong up trend over the last 3 months. During this period CCJ grew by +20.43% and saw a maximum drawdown of -14.88%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in CCJ till volatility reduces and a clear trend emerges.


CCJ has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, CCJ underperformed the SP500 index on 51% days.

During the last three months CCJ delivered losses on 58% days. However, it still managed to end this period in a profit. It's best return during this period (of +15.36%) was on Thursday, 27 Sep, 2018. While it's worst loss in the same period (of -3.55%) was on Friday, 26 Oct, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 6 Nov, 2018. The bullish trend returned +18.79% to investors. This was followed by a bearish trend that started on 7 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -9.55% of investor capital.

CCJ had 5 profitable and 7 loss making months over the last year. During the last year, CCJ underperformed SP500 index on monthly return basis. CCJ significantly outperformed SP500 index in Apr 2018, when it returned +13.96% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CCJ had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

Trading mastery is a state of complete acceptance of probability, not a state of fight it.
-- Yvan Byeajee

CCJ 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 CCJ's volatility from 19 Sep, 2018 to 6 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CCJ has significant negative skewness in it's return distribution. This indicates that CCJ is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in CCJ 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 CCJ. Therefore, SP500 must receive a lower allocation than CCJ in your portfolio. SP500 index usually has shorter drawdown period than CCJ.

Based on your interest in CCJ you may find it interesting to know that PFE, V and CSCO are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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