The party never started for HAL investors as it destroyed investor wealth
07 Dec, 201813 min read
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HALLIBURTON CO was among the worst performers today. It returned -0.37% to close at 29.68. During the last week it returned -5.57% and saw a maximum drawdown of -9.12% before bouncing back.
HAL is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +10.86% for investors.
HAL has been underperforming the SP500 index in recent time, after having outperformed till 27 Jan, 2017. Over the last 2 years 11 months and 3 days, HAL underperformed the SP500 index on 51% days.
HAL was profitable on 57% days in the last three months. During this time, it delivered on average -0.31% per day. It delivered it's worst daily return of -5.53%, during this period, on Tuesday, 13 Nov, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +12.07% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -15.54% of investor capital.
On monthly basis, HAL delivered losses in more months over the last year, than profits. HAL delivered profits less regularly than SP500 index. HAL was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -15.52% compared to -7.28% returned by SP500 index in Oct 2018. HAL had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from May 2018 to Aug 2018) during which period it delivered -26.11%. It is interesting to note that both HAL and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Everything is always feasible if you run a corporate finance exercise: you can always try to come out with a justification on how things could work. But the real issue is to say how do you translate that into practice.
HAL is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in HAL's volatility from 10 Sep, 2018 to 29 Oct, 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 HAL has significant positive skewness in it's return distribution. This indicates that investors can expect HAL to recover from drawdowns quickly. Which makes HAL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in HAL derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than HAL. Therefore, SP500 must receive a lower allocation than HAL in your portfolio. SP500 index usually has shorter drawdown period than HAL.
On a general note (since you are interested in HAL), EPIX has performed really well and deserves to be closely tracked for investment opportunities.
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