67.0 +0.32 (+0.48%) Sell

Joy for EHC investors as it manages to marginally outperform broader market

13 min read

ENCOMPASS HEALTH CORP ranked better than it's peers today. It delivered +0.48% to close at 67.0. It's recent 5 day performance has been -2.71%, -4.86%, -1.72%, +1.09% and +1.63%.

[Themes containing EHC]

EHC is currently in a bearish trend. The current bearish signal has generated a profit of +13.5% for investors in the last three months.


EHC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 17 Feb, 2016 to 22 Aug, 2018. Over the last 2 years 11 months and 14 days, EHC outperformed the SP500 index on 50% days. Which indicates that on days EHC outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months EHC was mostly loss making and delivered on average -0.22% per day. It's best return during this period (of +3.29%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -5.74%) was on Tuesday, 30 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 1 Nov, 2018 and went on till 8 Nov, 2018. This bullish trend returned +9.5% to investors.

During the last year EHC had 9 profitable months and 3 loss making months. EHC returned profits in more months than SP500 index. EHC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.26% compared to -7.75% returned by SP500 index in Dec 2018. EHC had a longer winning streak of profitable months than SP500 index. It went up in 8 straight months (from Jan 2018 to Aug 2018) during which period it delivered +50.2%. It is interesting to note that both EHC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Minimizing downside risk while maximizing the upside is a powerful concept.
-- Mohnish Pabrai

EHC 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 fall in EHC's volatility from 19 Sep, 2018 to 1 Oct, 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 EHC 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 EHC. Therefore, SP500 must receive a lower allocation than EHC in your portfolio. SP500 index usually has shorter drawdown period than EHC.

Based on your interest in EHC you may find it interesting to know that CSCO, V and AMZN are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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