CSOD investors herd to book profits while the going is good
07 Dec, 201813 min read
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CORNERSTONE ONDEMAND INC was among the worst performers on Friday. It delivered -2.44% to close at 51.1. On a day when the overall market breadth was 35%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.
CSOD is currently in a bullish trend. The previous long signal in CSOD has not been profitable for investors in general. If you are invested in CSOD at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
CSOD has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 27 Sep, 2016 to 2 Jan, 2018. Over the last 2 years 11 months and 3 days, CSOD outperformed the SP500 index on 52% days.
During the last three months CSOD was mostly loss making and delivered on average -0.17% per day. It's best return during this period (of +4.04%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -7.28%) was on Monday, 19 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 20 Nov, 2018 and went on till 30 Nov, 2018. This bullish trend returned +14.16% to investors.
The last 12 months saw CSOD's investors making profits in 7 months and incurring losses in 5 months. CSOD was less consistent in delivering monthly returs than SP500 index. CSOD significantly outperformed SP500 index in Jan 2018, when it returned +17.21% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CSOD 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 CSOD and SP500 index significantly outperform during months when quarterly/annual results are announced.
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CSOD 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 CSOD's volatility from 10 Sep, 2018 to 20 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that CSOD has significant positive skewness in it's return distribution. This indicates that investors can expect CSOD to recover from drawdowns quickly. Which makes CSOD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
SP500 index has more chance of extreme outcomes than CSOD. Therefore, SP500 must receive a lower allocation than CSOD in your portfolio. CSOD usually has shorter drawdown period than the SP500 index.
Based on your interest in CSOD you may find it interesting to know that HQY, EHC and BURL are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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