28.91 -0.38 (-1.33%) Buy

Search for alternative investments is on for CNP investors as it shows weakness

13 min read

CENTERPOINT ENERGY INC ranked among the worst performers today. It fell by -1.33% to close at 28.91. During the last week it surged by +0.45% and saw a maximum drawdown of -1.47% before bouncing back.

[Themes containing CNP]

Buy-and-Hold investors in CNP experienced a maximum drawdown of -4.16% over the last three months. It surged by +3.58% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


CNP has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Jan, 2016 to 11 Sep, 2017. Over the last 2 years 11 months and 10 days, CNP outperformed the SP500 index on 55% days.

CNP was profitable on 58% days in the last three months. During this time, it delivered on average +0.06% per day. It delivered it's worst daily return of -2.69%, during this period, on Wednesday, 14 Nov, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 6 Dec, 2018 and went on till 13 Dec, 2018. This bullish trend returned +4.52% to investors.

During the last year CNP had 7 profitable months and 5 loss making months. CNP returned profits in fewer months than SP500 index. CNP was also a less risky investment than SP500 index as it's worst month in the last year, Apr 2018, returned -6.12% compared to -7.28% returned by SP500 index in Oct 2018. CNP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

"Buy not on optimism, but on arithmetic.

CNP 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 fall in CNP's volatility from 19 Sep, 2018 to 28 Nov, 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 CNP has significant positive skewness in it's return distribution. This indicates that investors can expect CNP to recover from drawdowns quickly. Which makes CNP a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in CNP), KEYS is a small cap that deserves to be closely tracked for investment opportunities.

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