FDX investors dump it
07 Dec, 201813 min read
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FEDEX CORP was among the worst performers on Friday. It fell by -6.36% to close at 201.39. On a day when the overall market breadth was 35%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.
FDX is currently in a bearish trend. The current bearish signal has generated a profit of +15.81% for investors in the last three months.
FDX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 21 Jan, 2016 to 11 Jan, 2018. Over the last 2 years 11 months and 3 days, FDX outperformed the SP500 index on 54% days.
FDX returned losses on 51% days in the last three months. During this time, it delivered on average -0.32% per day. It delivered it's worst daily return of -6.36%, during this period, on Friday, 7 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -8.55% of investor capital.
During the last year FDX had 5 profitable months and 7 loss making months. FDX returned profits in fewer months than SP500 index. FDX was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -12.06% compared to -7.28% returned by SP500 index in Oct 2018. FDX had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -10.24%. It is interesting to note that both FDX and SP500 index significantly outperform during months when quarterly/annual results are announced.
An investment in knowledge pays the best interest.
-- Benjamin Franklin
FDX 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 FDX's volatility from 2 Oct, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that FDX 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.
Investors trading in FDX derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than FDX. Therefore, SP500 must receive a lower allocation than FDX in your portfolio. SP500 index usually has shorter drawdown period than FDX.
Based on your interest in FDX you may find it interesting to know that BURL, AAXN and HQY are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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