DOWDUPONT INC. ranked among the best performers on Tuesday. It delivered +1.18% to close at 52.29. On a day when the overall market breadth was 34%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.
Buy-and-Hold investors in DWDP experienced a maximum drawdown of -26.2% over the last three months. It delivered -23.92% 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 +21.83%.
DWDP has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Oct, 2017 to 25 Oct, 2018. Over the last 2 years 11 months and 14 days, DWDP underperformed the SP500 index on 49% days. Which indicates that on days DWDP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months DWDP was mostly loss making and delivered on average -0.41% per day. It's best return during this period (of +8.07%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -4.51%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 21 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -8.45% of investor capital.
The last 12 months saw DWDP's investors making profits in 7 months and incurring losses in 5 months. DWDP was less consistent in delivering monthly returs than SP500 index. DWDP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.82% compared to -7.75% returned by SP500 index in Dec 2018. DWDP 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 DWDP and SP500 index significantly outperform during months when quarterly/annual results are announced.
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
-- Warren Buffett
DWDP 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 DWDP's volatility from 8 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that DWDP 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 DWDP derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
Based on your interest in DWDP you may find it interesting to know that IBA has delivered similar performance as DWDP and can be considered as an alternative investment candidate (to DWDP).
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