11.19 -0.21 (-1.84%) Buy

Search for alternative investments is on for CHU investors as it underperforms

13 min read

CHU is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in CHINA UNICOM (HONG KONG) LTD (Foreign) made -0.01% per day. Friday's performance of -1.84% was a underperformance compared to it's daily average.

[Themes containing CHU]

Buy-and-Hold investors in CHU experienced a maximum drawdown of -15.07% over the last three months. It fell by -5.17% during this 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.


CHU has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 22 Aug, 2017 to 3 Oct, 2018. Over the last 2 years 11 months and 3 days, CHU underperformed the SP500 index on 52% days.

CHU returned losses on 58% days in the last three months. During this time, it delivered on average -0.07% per day. It delivered it's worst daily return of -3.46%, during this period, on Monday, 24 Sep, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 31 Oct, 2018 and went on till 7 Nov, 2018. This bullish trend returned +5.47% to investors.

During the last year CHU had 5 profitable months and 7 loss making months. CHU returned profits in fewer months than SP500 index. CHU was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -15.16% compared to -7.28% returned by SP500 index in Oct 2018. CHU had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -17.05%. It is interesting to note that both CHU and SP500 index significantly outperform during months when quarterly/annual results are announced.

It's not the situation, but whether we react (negative) or respond (positive) to the situation that's important.
-- Zig Ziglar

CHU is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in CHU's volatility from 20 Sep, 2018 to 2 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 CHU has significant negative skewness in it's return distribution. This indicates that CHU is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in CHU you may find it interesting to know that AAXN and HQY are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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