87.56 -1.25 (-1.43%) Sell

DGX investors looking to preserve capital

13 min read

QUEST DIAGNOSTICS INC is a falling knife that can bleed you if you catch it on Friday. It returned -1.43% to close at 87.56 which is it's 52 week low, down -23% from it's 52 week high.

[Themes containing DGX]

Buy-and-Hold investors in DGX experienced a maximum drawdown of -19.46% over the last three months. It returned -19.46% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +19.46% for investors.


DGX has been underperforming the SP500 index in recent time, after having outperformed till 30 Jun, 2017. Over the last 2 years 11 months and 3 days, DGX underperformed the SP500 index on 47% days. Which indicates that on days DGX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months DGX was mostly loss making and delivered on average -0.33% per day. It's best return during this period (of +2.52%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -9.27%) was on Thursday, 29 Nov, 2018. There was initially a bearish trend during this period which started on 2 Oct, 2018 and went on till 8 Oct, 2018. The trend delivered -5.07% losses to investors. This was followed by a bullish trend that started on 16 Oct, 2018 and ended on 19 Oct, 2018. This bullish trend delivered +2.54% to investors.

On monthly basis, DGX delivered losses in more months over the last year, than profits. DGX delivered profits less regularly than SP500 index. DGX was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.17% compared to -7.28% returned by SP500 index in Oct 2018. DGX had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -22.08%. It is interesting to note that both DGX and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market.

DGX is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in DGX's volatility from 11 Sep, 2018 to 3 Dec, 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 DGX has significant positive skewness in it's return distribution. This indicates that investors can expect DGX to recover from drawdowns quickly. Which makes DGX 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 DGX. Therefore, SP500 must receive a lower allocation than DGX in your portfolio. DGX usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in DGX), TWTR is a mid cap that deserves to be closely tracked for investment opportunities.

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