191.22 +1.14 (+0.59%) Sell

Profit booking on the minds of CP investors as it shows marginal outperformance

13 min read

CANADIAN PACIFIC RAILWAY LTD was among the best performers on Tuesday. It returned +0.59% to close at 191.22. It is currently trading -14% below it's 52 week high of 222.78.

[Themes containing CP]

Buy-and-Hold investors in CP experienced a maximum drawdown of -15.04% over the last three months. It lost -7.5% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +4.31%.


CP has been underperforming the SP500 index in recent time, after having outperformed till 9 Oct, 2018. Over the last 2 years 11 months and 7 days, CP outperformed the SP500 index on 51% days.

During the last three months CP delivered profits on 51% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.38%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -7.21%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +5.96% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 7 Dec, 2018. This bearish trend lost -10.94% of investor capital.

CP had 7 profitable and 5 loss making months over the last year. During the last year, CP underperformed SP500 index on monthly return basis. CP significantly outperformed SP500 index in Jul 2018, when it returned +9.96% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both CP and SP500 index significantly outperform during months when quarterly/annual results are announced.

"We need real campaign finance reform to loosen the grip of special interests on politics.

CP 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 CP's volatility from 17 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CP 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.

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

Based on your interest in CP you may find it interesting to know that BPOP has delivered similar performance as CP and can be considered as an alternative investment candidate (to CP).

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