COGNIZANT TECHNOLOGY SOLUTIONS CORP was among the worst performers on Friday. It lost -2.02% to close at 68.0. On a day when the overall market breadth was 35%, it closed higher than 11% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.
Buy-and-Hold investors in CTSH experienced a maximum drawdown of -14.29% over the last three months. It lost -10.01% during this strong 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 +4.57%.
CTSH has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, CTSH underperformed the SP500 index on 44% days. Which indicates that on days CTSH underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
CTSH returned losses on 61% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's worst daily return of -4.44%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 3 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -9.38% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +4.03% to investors.
CTSH had 6 profitable and 6 loss making months over the last year. During the last year, CTSH underperformed SP500 index on monthly return basis. CTSH was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.33% compared to -7.28% returned by SP500 index in Oct 2018. CTSH had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -15.73%. It is interesting to note that both CTSH and SP500 index significantly outperform during months when quarterly/annual results are announced.
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CTSH is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in CTSH's volatility from 10 Sep, 2018 to 31 Oct, 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 CTSH has significant positive skewness in it's return distribution. This indicates that investors can expect CTSH to recover from drawdowns quickly. Which makes CTSH a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in CTSH derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
On a general note (since you are interested in CTSH), three instruments that deserve special mention are AYTU, AMRH and TYHT. They have all outperformed the market and must be closely watched for investment opportunities.
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