CANADIAN SOLAR INC. (FOREIGN)

16.85 +0.04 (+0.24%) Buy

Joy for CSIQ investors as it outperforms broader market

13 min read

CANADIAN SOLAR INC. (Foreign) outperformed on Thursday. It surged by +0.24% to close at 16.85. On a day when the overall market breadth was 35%, it closed higher than 89% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing CSIQ]

Buy-and-Hold investors in CSIQ experienced a maximum drawdown of -15.2% over the last three months. It surged by +15.25% during this strong 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.

Trend

CSIQ has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2016 to 21 Aug, 2018. Over the last 2 years 11 months and 9 days, CSIQ underperformed the SP500 index on 50% days. Which indicates that on days CSIQ underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

CSIQ was profitable on 52% days in the last three months. During this time, it delivered on average +0.27% per day. It delivered it's best daily return of +11.09%, during this period, on Thursday, 15 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +4.78%) started on 14 Sep, 2018 and went on till 20 Sep, 2018 while the bearish trend (which returned -14.06%) started on 22 Oct, 2018 and went on till 26 Oct, 2018.

The last 12 months saw CSIQ's investors making profits in 7 months and incurring losses in 5 months. CSIQ was less consistent in delivering monthly returs than SP500 index. CSIQ was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -26.31% compared to -7.28% returned by SP500 index in Oct 2018. CSIQ had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Never spend your money before you have it.
-- Thomas Jefferson

CSIQ 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 CSIQ's volatility from 14 Sep, 2018 to 16 Nov, 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 CSIQ 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.

Investors trading in CSIQ derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in CSIQ), three instruments that have performed similar to CSIQ are HHS, PNTR and TWMC. They must all be evaluated as alternative investment options and for diversification.

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