25.84 -0.99 (-3.83%) Sell

DVN is a falling knife, continues to bleed every investor trying to catch it

13 min read

DVN delivered massive losses today. On a longer term basis, investors in DEVON ENERGY CORP made +0.04% per day. Friday's performance of -3.83% was a underperformance compared to it's daily average.

[Themes containing DVN]

Buy-and-Hold investors in DVN experienced a maximum drawdown of -37.81% over the last three months. It delivered -33.42% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +33.42% for investors.


DVN has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 30 Nov, 2016 to 30 Nov, 2018. Over the last 2 years 11 months and 10 days, DVN underperformed the SP500 index on 52% days.

DVN returned losses on 56% days in the last three months. During this time, it delivered on average -0.61% per day. It delivered it's worst daily return of -7.36%, during this period, on Tuesday, 20 Nov, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +6.88%) started on 17 Sep, 2018 and went on till 24 Sep, 2018 while the bearish trend (which returned -14.08%) started on 17 Oct, 2018 and went on till 24 Oct, 2018.

The last 12 months saw DVN's investors making profits in 5 months and incurring losses in 7 months. DVN was less consistent in delivering monthly returs than SP500 index. DVN was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -25.86% compared to -7.28% returned by SP500 index in Oct 2018. DVN had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both DVN and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.

DVN is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DVN's volatility from 25 Sep, 2018 to 20 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 DVN has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in DVN derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

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

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