49.76 -1.11 (-2.24%) Sell

HES is a falling knife, continues to bleed every investor trying to catch it

13 min read

HES ranked among the worst performers today. On a longer term basis, investors in HESS CORP made +0.02% per day. Monday's performance of -2.24% was a significant underperformance compared to it's daily average.

[Themes containing HES]

HES showed a strong down trend over the last 3 months. During this period HES returned -28.32% and saw a maximum drawdown of -33.29%. There was a short signal during this period which returned +26.37%.


HES has been underperforming the SP500 index in recent time, after having outperformed till 22 Apr, 2016. Over the last 2 years 11 months and 10 days, HES underperformed the SP500 index on 49% days. Which indicates that on days HES underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HES was mostly loss making and delivered on average -0.51% per day. It's best return during this period (of +4.75%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -6.87%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 1 Oct, 2018. The bullish trend returned +5.83% 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 -12.14% of investor capital.

On monthly basis, HES delivered profits in more months over the last year, than losses. HES delivered profits less regularly than SP500 index. HES was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -23.05% compared to -7.28% returned by SP500 index in Oct 2018. HES had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +55.74%.

Live as if you were to die tomorrow. Learn as if you were to live forever.
-- Mahatma Gandhi

HES 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 HES's volatility from 27 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that HES 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 HES 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 HES. Therefore, SP500 must receive a lower allocation than HES in your portfolio. SP500 index usually has shorter drawdown period than HES.

Based on your interest in HES you may find it interesting to know that RL has delivered similar performance as HES and can be considered as an alternative investment candidate (to HES).

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