35.53 -1.43 (-4.02%) Sell

Don't invest in CVI now, it is a really dangerous investment now

13 min read

CVR ENERGY INC ranked among the worst performers on Friday. It delivered -4.02% to close at 35.53. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing CVI]

CVI showed a bearish trend over the last 3 months. During this period CVI delivered -8.1% and saw a maximum drawdown of -17.37%. There were 2 short signals during this period that returned a cumulative of +3.98% to investors.


CVI has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Jan, 2016 to 9 Aug, 2017. Over the last 2 years 11 months and 10 days, CVI underperformed the SP500 index on 51% days.

During the last three months CVI was mostly loss making and delivered on average -0.09% per day. It's best return during this period (of +13.73%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.39%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -10.19% of investor capital.

The last 12 months saw CVI's investors making profits in 6 months and incurring losses in 6 months. CVI was less consistent in delivering monthly returs than SP500 index. CVI was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -17.24% compared to -7.28% returned by SP500 index in Oct 2018. CVI 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 CVI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Some of the people in finance touch enormous parts of the economy.
-- Stephen A. Schwarzman

CVI 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 CVI's volatility from 18 Sep, 2018 to 26 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 CVI has significant negative skewness in it's return distribution. This indicates that CVI is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in CVI you may find it interesting to know that AYTU and SBOT have both shown remarkable performance and deserve to be on every investors' watchlist.

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