Search for alternative investments is on for EQR investors as it underperforms
12 Dec, 201813 min read
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EQUITY RESIDENTIAL significantly underperformed on Wednesday. It fell by -2.69% to close at 69.5. It is currently trading +25% above it's 52 week low of 55.26 and is down only -4% from it's 52 week high.
Buy-and-Hold investors in EQR experienced a maximum drawdown of -8.38% over the last three months. It increased by +2.0% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.
EQR has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 19 Jan, 2016 to 26 Feb, 2018. Over the last 2 years 11 months and 8 days, EQR underperformed the SP500 index on 49% days. Which indicates that on days EQR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months EQR was mostly profitable and delivered on average +0.04% per day. It's best return during this period (of +2.67%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -2.81%) was on Thursday, 11 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 26 Nov, 2018 and went on till 3 Dec, 2018. This bullish trend returned +3.94% to investors.
During the last year EQR had 6 profitable months and 6 loss making months. EQR returned profits in fewer months than SP500 index. EQR significantly outperformed SP500 index in Nov 2018, when it returned +9.68% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. EQR had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
"There is a huge amount of freedom that is derived from not fighting the market.
EQR 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 EQR's volatility from 13 Sep, 2018 to 12 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that EQR has significant positive skewness in it's return distribution. This indicates that investors can expect EQR to recover from drawdowns quickly. Which makes EQR a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
EQR has more chance of extreme outcomes than the SP500 index. Therefore, EQR must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than EQR.
Based on your interest in EQR you may find it interesting to know that ZBRA and AAXN are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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