HANMI FINANCIAL CORP

19.64 -0.2 (-1.01%) Sell

Want to invest in HAFC? Avoid as it has destroyed investor wealth

13 min read

HANMI FINANCIAL CORP has destroyed investor wealth on Friday. It returned -1.01% to close at 19.64. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing HAFC]

HAFC showed a strong down trend over the last 3 months. During this period HAFC returned -24.02% and saw a maximum drawdown of -29.69%. There was a short signal during this period which returned +24.02%.

Trend

HAFC has been underperforming the SP500 index in recent time, after having outperformed till 4 Jan, 2017. Over the last 2 years 11 months and 10 days, HAFC underperformed the SP500 index on 49% days. Which indicates that on days HAFC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

HAFC returned losses on 58% days in the last three months. During this time, it delivered on average -0.4% per day. It delivered it's worst daily return of -15.05%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 16 Oct, 2018 and went on till 22 Oct, 2018. The trend delivered -7.93% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 31 Oct, 2018. This bullish trend delivered +13.67% to investors.

On monthly basis, HAFC delivered losses in more months over the last year, than profits. HAFC delivered profits less regularly than SP500 index. HAFC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.44% compared to -7.28% returned by SP500 index in Oct 2018. HAFC and SP500 index, both had periods of 2 consecutive losing months.

The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.
-- T.T. Munger

HAFC 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 HAFC's volatility from 28 Sep, 2018 to 25 Oct, 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 HAFC has significant positive skewness in it's return distribution. This indicates that investors can expect HAFC to recover from drawdowns quickly. Which makes HAFC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in HAFC), AMZN is a large cap that deserves to be closely tracked for investment opportunities.

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