43.5 -2.15 (-4.94%) Sell

Don't even consider investing in CMP now, it is a high risk investment

13 min read

CMP significantly underperformed today. On a longer term basis, investors in COMPASS MINERALS INTERNATIONAL INC made +0.03% per day. Tuesday's performance of -4.94% was a underperformance compared to it's daily average.

[Themes containing CMP]

CMP showed a strong bearish trend over the last 3 months. During this period CMP delivered -35.94% and saw a maximum drawdown of -37.77%. There was a short signal during this period which returned +16.34%.


CMP has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Feb, 2016 to 25 Oct, 2018. Over the last 2 years 11 months and 14 days, CMP underperformed the SP500 index on 50% days. Which indicates that on days CMP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months CMP was mostly loss making and delivered on average -0.63% per day. It's best return during this period (of +6.0%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -19.43%) was on Tuesday, 23 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -5.66% of investor capital.

The last 12 months saw CMP's investors making profits in 5 months and incurring losses in 7 months. CMP was less consistent in delivering monthly returs than SP500 index. CMP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -27.79% compared to -7.75% returned by SP500 index in Dec 2018. CMP had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both CMP and SP500 index significantly outperform during months when quarterly/annual results are announced.

I'd like to live as a poor man with lots of money.
-- Pablo Picasso

CMP 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 CMP's volatility from 19 Sep, 2018 to 24 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

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

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

Based on your interest in CMP you may find it interesting to know that ECYT has shown remarkable performance this year and deserves to be on every investors' watchlist.

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