136.44 -2.34 (-1.71%) Sell

The party never started for HON investors as it delivered massive losses

13 min read

HONEYWELL INTERNATIONAL INC ranked among the worst performers on Friday. It returned -1.71% to close at 136.44 which is it's 52 week low, down -18% from it's 52 week high.

[Themes containing HON]

Buy-and-Hold investors in HON experienced a maximum drawdown of -18.47% over the last three months. It returned -17.68% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +15.22%.


HON has been underperforming the SP500 index in recent time, after having outperformed till 30 Nov, 2017. Over the last 2 years 11 months and 10 days, HON outperformed the SP500 index on 52% days.

During the last three months HON was mostly loss making and delivered on average -0.3% per day. It's best return during this period (of +2.14%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -4.23%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -9.24% losses to investors. This was followed by a bullish trend that started on 2 Nov, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +4.15% to investors.

On monthly basis, HON delivered profits and losses in equal number of months. HON delivered profits less regularly than SP500 index. HON was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.99% compared to -7.28% returned by SP500 index in Oct 2018. HON had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both HON and SP500 index significantly outperform during months when quarterly/annual results are announced.

I don't really enjoy finance and accounting.
-- Holly Branson

HON 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 HON's volatility from 25 Sep, 2018 to 29 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 HON has significant positive skewness in it's return distribution. This indicates that investors can expect HON to recover from drawdowns quickly. Which makes HON a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in HON derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in HON), two instruments that deserve special mention are AMRH and SBOT. They have significantly outperformed the overall market.

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