65.83 -2.88 (-4.37%) Sell

Looking to invest in CSX? Avoid at the moment as it has destroyed investor wealth

13 min read

CSX CORP has destroyed investor wealth today. It fell by -4.37% to close at 65.83. It's recent 5 day performance has been -0.06%, +1.16%, -0.31%, +0.4% and -2.56%.

[Themes containing CSX]

CSX showed a strong bearish trend over the last 3 months. During this period CSX fell by -10.24% and saw a maximum drawdown of -12.45%. There were 2 short signals during this period that returned a cumulative of +1.13% to investors.


CSX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Feb, 2016 to 27 Aug, 2018. Over the last 2 years 11 months and 10 days, CSX outperformed the SP500 index on 53% days.

During the last three months CSX was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +4.75%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -6.77%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 4 profitable days, which started on 13 Nov, 2018 and went on till 16 Nov, 2018. This bullish trend returned +4.21% to investors.

During the last year CSX had 7 profitable months and 5 loss making months. CSX returned profits in fewer months than SP500 index. CSX significantly outperformed SP500 index in Jul 2018, when it returned +9.99% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CSX 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 CSX and SP500 index significantly outperform during months when quarterly/annual results are announced.

Buy when everyone else is selling and hold until everyone else is buying. That's not just a catchy slogan. It's the very essence of successful investing.
-- J. Paul Getty

CSX is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in CSX's volatility from 17 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CSX 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 CSX 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 CSX. Therefore, SP500 must receive a lower allocation than CSX in your portfolio. SP500 index usually has shorter drawdown period than CSX.

Based on your interest in CSX you may find it interesting to know that STAR, ICCH and HASI have all performed similar to CSX and qualify as alternative investment candidates that must be evaluated for diversification.

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