5.81 -0.38 (-6.59%) Sell

The party never started for ECA investors as it ranked among the worst performers

13 min read

ENCANA CORP has destroyed investor wealth on Friday. It returned -6.59% to close at 5.81. On a day when the overall market breadth was 35%, it closed higher than 79% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ECA]

ECA is currently in a down trend. The current bearish signal has generated a profit of +51.18% for investors in the last three months.


ECA has been underperforming the SP500 index in recent time, after having outperformed till 25 Jan, 2017. Over the last 2 years 11 months and 10 days, ECA underperformed the SP500 index on 51% days.

ECA returned losses on 61% days in the last three months. During this time, it delivered on average -1.08% per day. It delivered it's worst daily return of -12.5%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +11.08% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -13.9% of investor capital.

On monthly basis, ECA delivered losses in more months over the last year, than profits. ECA delivered profits less regularly than SP500 index. ECA was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -34.38% compared to -7.28% returned by SP500 index in Oct 2018. ECA had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

"Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.

ECA is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ECA's volatility from 27 Sep, 2018 to 14 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 ECA has significant negative skewness in it's return distribution. This indicates that ECA is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in ECA), two instruments that have been extremely volatile in recent times are OPNT and NVCN. Investors in these instruments should consider reducing their exposure (to OPNT and NVCN) and diversifying their portfolios.

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