71.88 -1.46 (-2.03%) Sell

Doubt in the minds of CVS investors as it was among the worst performers

13 min read

CVS HEALTH CORP delivered massive losses today. It fell by -2.03% to close at 71.88. During the last week it fell by -1.99% and saw a maximum drawdown of -3.52% before bouncing back.

[Themes containing CVS]

Buy-and-Hold investors in CVS experienced a maximum drawdown of -12.63% over the last three months. It fell by -7.96% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


CVS has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 9 May, 2016 to 2 Aug, 2018. Over the last 2 years 11 months and 10 days, CVS underperformed the SP500 index on 51% days.

During the last three months CVS was mostly loss making and delivered on average -0.12% per day. It's best return during this period (of +5.71%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -7.26%) was on Thursday, 11 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 14 Nov, 2018 and ended on 21 Nov, 2018. This bearish trend lost -7.24% of investor capital.

During the last year CVS had 6 profitable months and 6 loss making months. CVS returned profits in fewer months than SP500 index. CVS significantly outperformed SP500 index in Aug 2018, when it returned +16.0% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CVS had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both CVS and SP500 index significantly outperform during months when quarterly/annual results are announced.

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

CVS 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 CVS's volatility from 9 Oct, 2018 to 7 Nov, 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 CVS has significant positive skewness in it's return distribution. This indicates that investors can expect CVS to recover from drawdowns quickly. Which makes CVS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in CVS 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 CVS. Therefore, SP500 must receive a lower allocation than CVS in your portfolio. CVS usually has shorter drawdown period than the SP500 index.

Based on your interest in CVS you may find it interesting to know that NVCN, IX and VIPS are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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