Are you evaluating investing in CNQ? Wait as it performed worse than the broader market
13 Dec, 201813 min read
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CANADIAN NATURAL RESOURCES LTD (Foreign) was among the worst performers today. It lost -0.68% to close at 26.44. It's recent 5 day performance has been +2.42%, -3.17%, -0.33%, +2.08% and -2.4%.
CNQ showed a strong down trend over the last 3 months. During this period CNQ lost -16.78% and saw a maximum drawdown of -27.49%. There were 3 short signals during this period that returned a cumulative of +2.7% to investors.
CNQ has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, CNQ underperformed the SP500 index on 51% days.
During the last three months CNQ was mostly loss making and delivered on average -0.26% per day. It's best return during this period (of +10.1%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -6.28%) was on Friday, 23 Nov, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 19 Sep, 2018. The bullish trend returned +3.97% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -13.21% of investor capital.
CNQ had 5 profitable and 7 loss making months over the last year. During the last year, CNQ underperformed SP500 index on monthly return basis. CNQ was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -18.71% compared to -7.28% returned by SP500 index in Oct 2018. CNQ had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Aug 2018 to Nov 2018) during which period it delivered -37.81%. It is interesting to note that both CNQ and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Cash combined with courage in a time of crisis is priceless.
CNQ 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 CNQ's volatility from 14 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that CNQ has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
CNQ has more chance of extreme outcomes than the SP500 index. Therefore, CNQ must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than CNQ.
Based on your interest in CNQ you may find it interesting to know that TACO and GEO have both performed similar to CNQ and can be considered by investors as alternative investment options.
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