56.07 -0.28 (-0.5%) Sell

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

13 min read

CARNIVAL CORP significantly underperformed on Tuesday. It returned -0.5% to close at 56.07. On a day when the overall market breadth was 35%, it closed higher than 11% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing CCL]

Buy-and-Hold investors in CCL experienced a maximum drawdown of -19.5% over the last three months. It returned -10.57% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


CCL has been underperforming the SP500 index in recent time, after having outperformed till 21 Aug, 2017. Over the last 2 years 11 months and 7 days, CCL underperformed the SP500 index on 48% days. Which indicates that on days CCL underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months CCL was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +3.51%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.84%) was on Thursday, 27 Sep, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +6.92% to investors. This was followed by a bearish trend that started on 1 Oct, 2018 and ended on 5 Oct, 2018. This bearish trend lost -5.1% of investor capital.

On monthly basis, CCL delivered losses in more months over the last year, than profits. CCL delivered profits less regularly than SP500 index. CCL was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.82% compared to -7.28% returned by SP500 index in Oct 2018. CCL had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -20.18%. It is interesting to note that both CCL and SP500 index significantly outperform during months when quarterly/annual results are announced.

"There is a huge amount of freedom that is derived from not fighting the market.

CCL 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 CCL's volatility from 26 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 CCL has significant positive skewness in it's return distribution. This indicates that investors can expect CCL to recover from drawdowns quickly. Which makes CCL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in CCL derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

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

Based on your interest in CCL you may find it interesting to know that LULU, TWTR and ABMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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