DIAMOND OFFSHORE DRILLING, INC. is a falling knife that can bleed you if you catch it on Friday. It fell by -5.32% to close at 10.33. On a day when the overall market breadth was 35%, it closed higher than 85% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in DO experienced a maximum drawdown of -50.34% over the last three months. It fell by -40.32% during this strong 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. The net profit from Short signals was +29.81%.
DO has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 7 Jun, 2016 to 14 Dec, 2018. One must note that DO is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 10 days, DO underperformed the SP500 index on 51% days.
DO returned losses on 51% days in the last three months. During this time, it delivered on average -0.76% per day. It delivered it's worst daily return of -8.06%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 17 Sep, 2018 and went on till 25 Sep, 2018. This bullish trend returned +14.63% to investors.
During the last year DO had 4 profitable months and 8 loss making months. DO returned profits in fewer months than SP500 index. DO was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -29.45% compared to -7.28% returned by SP500 index in Oct 2018. DO had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -58.61%.
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DO 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 DO's volatility from 18 Sep, 2018 to 13 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 DO has significant negative skewness in it's return distribution. This indicates that DO is very risky for short-term investment and can significantly underperform for long durations.
Based on your interest in DO you may find it interesting to know that CSCO is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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