13.59 -0.6 (-4.43%) Sell

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

13 min read

HEWLETT PACKARD ENTERPRISE CO was among the worst performers on Monday. It fell by -4.43% to close at 13.59. On a day when the overall market breadth was 34%, it closed higher than 69% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing HPE]

HPE showed a strong bearish trend over the last 3 months. During this period HPE fell by -17.89% and saw a maximum drawdown of -20.15%. There was a short signal during this period which returned +15.8%.


HPE has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 7 Dec, 2016 to 22 Nov, 2017. Over the last 2 years 11 months and 10 days, HPE underperformed the SP500 index on 47% days. Which indicates that on days HPE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HPE was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +6.45%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -8.18%) was on Friday, 7 Dec, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +9.04%) started on 30 Oct, 2018 and went on till 5 Nov, 2018 while the bearish trend (which returned -13.9%) started on 5 Oct, 2018 and went on till 11 Oct, 2018.

During the last year HPE had 4 profitable months and 8 loss making months. HPE returned profits in fewer months than SP500 index. HPE significantly outperformed SP500 index in Feb 2018, when it returned +13.35% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HPE had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Mar 2018 to Jun 2018) during which period it delivered -20.81%. It is interesting to note that both HPE and SP500 index significantly outperform during months when quarterly/annual results are announced.

The studios don't finance anymore, they get outside funds.
-- Robert Rodriguez

HPE 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 surge in HPE's volatility from 24 Sep, 2018 to 7 Dec, 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 HPE has significant positive skewness in it's return distribution. This indicates that investors can expect HPE to recover from drawdowns quickly. Which makes HPE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

On a general note (since you are interested in HPE), three instruments that deserve special mention are AMRH, APRN and TYHT. They have all outperformed the market and must be closely watched for investment opportunities.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter