22.61 -0.68 (-3.0%) Sell

COG investors dump it

13 min read

CABOT OIL & GAS CORP significantly underperformed on Monday. It fell by -3.0% to close at 22.61. It is currently trading -22% below it's 52 week high of 29.12.

[Themes containing COG]

COG is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for COG's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +1.57%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to COG.


COG has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 28 Jun, 2016 to 17 Sep, 2018. Over the last 2 years 11 months and 10 days, COG outperformed the SP500 index on 49% days. Which indicates that on days COG outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months COG delivered losses on 52% days. However, it still managed to end this period in a profit. It's best return during this period (of +7.1%) was on Friday, 26 Oct, 2018. While it's worst loss in the same period (of -6.86%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 2 Oct, 2018 and went on till 9 Oct, 2018. This bullish trend returned +9.14% to investors.

During the last year COG had 5 profitable months and 7 loss making months. COG returned profits in fewer months than SP500 index. COG was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -8.82% compared to -7.28% returned by SP500 index in Oct 2018. COG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -17.88%. It is interesting to note that both COG and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we've got 24 hours each.
-- Christopher Rice

COG 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 surge in COG's volatility from 19 Oct, 2018 to 30 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 COG has significant negative skewness in it's return distribution. This indicates that COG is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in COG derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in COG), two instruments that deserve special mention are NSPR and TYHT. They have significantly outperformed the overall market.

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