DIAMONDROCK HOSPITALITY CO was among the worst performers on Tuesday. It returned -1.42% to close at 9.73. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.
Buy-and-Hold investors in DRH experienced a maximum drawdown of -18.44% over the last three months. It returned -18.24% 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 +14.68%.
DRH has been underperforming the SP500 index in recent time, after having outperformed till 4 Jan, 2017. Over the last 2 years 11 months and 7 days, DRH underperformed the SP500 index on 48% days. Which indicates that on days DRH underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months DRH was mostly loss making and delivered on average -0.32% per day. It's best return during this period (of +4.13%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -2.96%) was on Tuesday, 6 Nov, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +0.25% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -6.2% of investor capital.
On monthly basis, DRH delivered profits and losses in equal number of months. DRH delivered profits less regularly than SP500 index. DRH significantly outperformed SP500 index in May 2018, when it returned +15.2% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DRH 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 DRH and SP500 index significantly outperform during months when quarterly/annual results are announced.
Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros
DRH 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 DRH's volatility from 28 Sep, 2018 to 7 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that DRH has significant positive skewness in it's return distribution. This indicates that investors can expect DRH to recover from drawdowns quickly. Which makes DRH a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Based on your interest in DRH you may find it interesting to know that TPNL has shown remarkable performance this year and deserves to be on every investors' watchlist.
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