28.56 -0.69 (-2.43%) Sell

Don't invest in CHSP now, it is an investor's nightmare

13 min read

CHSP significantly underperformed today. On a longer term basis, investors in CHESAPEAKE LODGING TRUST made -0.01% per day. Friday's performance of -2.43% was a significant underperformance compared to it's daily average.

[Themes containing CHSP]

CHSP showed a strong down trend over the last 3 months. During this period CHSP lost -13.03% and saw a maximum drawdown of -16.17%. There were 2 short signals during this period that returned a cumulative of +8.32% to investors.


CHSP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, CHSP underperformed the SP500 index on 45% days. Which indicates that on days CHSP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months CHSP was mostly loss making and delivered on average -0.21% per day. It's best return during this period (of +3.92%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -3.98%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +2.78% to investors. This was followed by a bearish trend that started on 9 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -8.7% of investor capital.

CHSP had 6 profitable and 6 loss making months over the last year. During the last year, CHSP underperformed SP500 index on monthly return basis. CHSP significantly outperformed SP500 index in May 2018, when it returned +9.11% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CHSP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both CHSP and SP500 index significantly outperform during months when quarterly/annual results are announced.

My formula for success is rise early, work late and strike oil.
-- JP Getty

CHSP 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 CHSP's volatility from 13 Sep, 2018 to 5 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

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

On a general note (since you are interested in CHSP), two instruments that have delivered similar performance as CHSP are MRT and ~HOUSEWARES. They are suitable as good alternative investment candidates that can diversify your portfolio.

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