16.03 -0.12 (-0.74%) Sell

Don't invest in HDP now, it is a volatile investment

13 min read

HORTONWORKS, INC. ranked among the worst performers on Friday. It delivered -0.74% to close at 16.03. It is currently trading -37% below it's 52 week high of 25.5.

[Themes containing HDP]

HDP showed a strong bearish trend over the last 3 months. During this period HDP delivered -31.9% and saw a maximum drawdown of -43.71%. There was a short signal during this period which returned +10.4%.


HDP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2016 to 18 Oct, 2016. Over the last 2 years 11 months and 10 days, HDP underperformed the SP500 index on 49% days. Which indicates that on days HDP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HDP was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +12.67%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -11.79%) was on Friday, 9 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +13.48%) started on 30 Oct, 2018 and went on till 5 Nov, 2018 while the bearish trend (which returned -20.15%) started on 5 Oct, 2018 and went on till 11 Oct, 2018.

The last 12 months saw HDP's investors making profits in 5 months and incurring losses in 7 months. HDP was less consistent in delivering monthly returs than SP500 index. HDP significantly outperformed SP500 index in Aug 2018, when it returned +28.13% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HDP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -29.79%.

"There is no one-decision stocks

HDP 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 fall in HDP's volatility from 17 Sep, 2018 to 3 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 HDP has significant positive skewness in it's return distribution. This indicates that investors can expect HDP to recover from drawdowns quickly. Which makes HDP 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 HDP. Therefore, SP500 must receive a lower allocation than HDP in your portfolio. HDP usually has shorter drawdown period than the SP500 index.

Based on your interest in HDP you may find it interesting to know that EHC and AAXN are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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