EW continues to mint money for it's investors
13 Dec, 201813 min read
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EDWARDS LIFESCIENCES CORP ranked among the best performers on Thursday. It delivered +0.49% to close at 163.94. It is currently trading +46% above it's 52 week low of 111.58 and is down only -5% from it's 52 week high.
Buy-and-Hold investors in EW experienced a maximum drawdown of -20.03% over the last three months. It delivered +10.78% during this strong bullish trending period. There were no short signals during this period, while the long signal generated good profits of +10.24% for investors.
EW has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 1 Dec, 2016 to 13 Dec, 2018. One must note that EW is currently at it's peak outperformance to the SP500 index which makes it a good investment candidate. Over the last 2 years 11 months and 9 days, EW outperformed the SP500 index on 53% days.
During the last three months EW was mostly profitable and delivered on average +0.19% per day. It's best return during this period (of +7.67%) was on Monday, 24 Sep, 2018. While it's worst loss in the same period (of -5.35%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 19 Sep, 2018 and went on till 28 Sep, 2018. This bullish trend returned +18.0% to investors.
During the last year EW had 9 profitable months and 3 loss making months. EW returned profits in more months than SP500 index. EW significantly outperformed SP500 index in Sep 2018, when it returned +20.7% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. EW had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
EW is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in EW's volatility from 18 Sep, 2018 to 24 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that EW has significant positive skewness in it's return distribution. This indicates that investors can expect EW to recover from drawdowns quickly. Which makes EW a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in EW derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than EW. Therefore, SP500 must receive a lower allocation than EW in your portfolio. EW usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in EW), if you are an investor in NVCN, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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