69.77 -0.46 (-0.66%) Buy

Search for alternative investments is on for ES investors as it shows weakness

13 min read

EVERSOURCE ENERGY significantly underperformed on Friday. It returned -0.66% to close at 69.77. On a day when the overall market breadth was 35%, it closed higher than 14% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ES]

Buy-and-Hold investors in ES experienced a maximum drawdown of -5.6% over the last three months. It returned +9.41% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +4.79%.


ES has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, ES outperformed the SP500 index on 52% days.

During the last three months ES was mostly profitable and delivered on average +0.15% per day. It's best return during this period (of +2.48%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -2.53%) was on Wednesday, 19 Sep, 2018. There was initially a bearish trend during this period which started on 10 Oct, 2018 and went on till 15 Oct, 2018. The trend delivered -3.17% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 13 Nov, 2018. This bullish trend delivered +5.61% to investors.

On monthly basis, ES delivered profits in more months over the last year, than losses. ES delivered profits less regularly than SP500 index. ES was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -9.65% compared to -7.28% returned by SP500 index in Oct 2018. ES had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ES and SP500 index significantly outperform during months when quarterly/annual results are announced.

"You and I come by road or rail, but economists travel on infrastructure.

ES 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 ES's volatility from 18 Sep, 2018 to 2 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 ES has significant positive skewness in it's return distribution. This indicates that investors can expect ES to recover from drawdowns quickly. Which makes ES a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ES), two instruments that deserve special mention are TNDM and HEAR. They have significantly outperformed the overall market this year.

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