6.69 -0.22 (-3.32%) Sell

Prayers for CMCM investors as it ranked among the worst performers

13 min read

CHEETAH MOBILE INC. (Foreign) was among the worst performers on Monday. It delivered -3.32% to close at 6.69. On a day when the overall market breadth was 34%, it closed higher than 71% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing CMCM]

Buy-and-Hold investors in CMCM experienced a maximum drawdown of -44.98% over the last three months. It delivered -32.83% 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.


CMCM has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 22 Mar, 2016 to 27 Nov, 2018. Over the last 2 years 11 months and 10 days, CMCM underperformed the SP500 index on 52% days.

During the last three months CMCM was mostly loss making and delivered on average -0.41% per day. It's best return during this period (of +21.17%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -32.84%) was on Tuesday, 27 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 1 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -19.0% of investor capital.

The last 12 months saw CMCM's investors making profits in 4 months and incurring losses in 8 months. CMCM was less consistent in delivering monthly returs than SP500 index. CMCM significantly outperformed SP500 index in Jan 2018, when it returned +39.01% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CMCM had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -43.31%. It is interesting to note that both CMCM and SP500 index significantly outperform during months when quarterly/annual results are announced.

The stock market is a discounter of all known information.
-- Kenneth Fisher

CMCM 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 CMCM's volatility from 18 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

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

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

On a general note (since you are interested in CMCM), if you are evaluating CMCM as an investment candidate, then you should read about CDXC which has delivered similar performance and can help diversify your portfolio.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter