ECHO GLOBAL LOGISTICS, INC.

21.03 -0.5 (-2.37%) Sell

Prayers for ECHO investors as it significantly underperforms

13 min read

ECHO GLOBAL LOGISTICS, INC. significantly underperformed on Friday. It delivered -2.37% to close at 21.03. 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 -0.0191%.

[Themes containing ECHO]

ECHO is currently in a bearish trend. The current bearish signal has generated a profit of +33.76% for investors in the last three months.

Trend

ECHO has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 21 Mar, 2016 to 31 Jul, 2017. Over the last 2 years 11 months and 10 days, ECHO underperformed the SP500 index on 50% days. Which indicates that on days ECHO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ECHO was mostly loss making and delivered on average -0.74% per day. It's best return during this period (of +7.51%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.88%) was on Monday, 24 Sep, 2018. The longest stort-term trend during this period was 5 losing days, which started on 30 Nov, 2018 and ended on 7 Dec, 2018. This bearish trend lost -12.12% of investor capital.

The last 12 months saw ECHO's investors making profits in 5 months and incurring losses in 7 months. ECHO was less consistent in delivering monthly returs than SP500 index. ECHO was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -17.11% compared to -7.28% returned by SP500 index in Oct 2018. ECHO had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -44.32%. It is interesting to note that both ECHO and SP500 index significantly outperform during months when quarterly/annual results are announced.

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ECHO 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 ECHO's volatility from 20 Sep, 2018 to 29 Oct, 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 ECHO 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.

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

Based on your interest in ECHO you may find it interesting to know that ICPT, VIPS and IX are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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