CGNX investors hurt by serious losses
11 Dec, 201813 min read
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CGNX delivered massive losses today. On a longer term basis, investors in COGNEX CORP made -0.08% per day. Tuesday's performance of -1.48% was a underperformance compared to it's daily average.
Buy-and-Hold investors in CGNX experienced a maximum drawdown of -32.82% over the last three months. It fell by -26.65% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +18.52%.
CGNX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 8 Jan, 2016 to 21 Nov, 2017. Over the last 2 years 11 months and 7 days, CGNX outperformed the SP500 index on 54% days.
CGNX returned losses on 62% days in the last three months. During this time, it delivered on average -0.45% per day. It delivered it's worst daily return of -9.76%, during this period, on Friday, 5 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -25.52% of investor capital.
During the last year CGNX had 5 profitable months and 7 loss making months. CGNX returned profits in fewer months than SP500 index. CGNX was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -24.42% compared to -7.28% returned by SP500 index in Oct 2018. CGNX 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 -25.92%.
"Even though the quotes above come from some of the most intelligent people on Wall Street, the ideas behind them are both quite simple and insightful.
CGNX is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in CGNX's volatility from 19 Sep, 2018 to 30 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 CGNX 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.
SP500 index has more chance of extreme outcomes than CGNX. Therefore, SP500 must receive a lower allocation than CGNX in your portfolio. SP500 index usually has shorter drawdown period than CGNX.
On a general note (since you are interested in CGNX), three instruments that deserve special mention are AYTU, AMRH and APRN. They have all outperformed the market and must be closely watched for investment opportunities.
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