Looking to invest in HUM? Avoid at the moment as it delivered massive losses
07 Dec, 201813 min read
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HUMANA INC delivered massive losses on Friday. It fell by -3.25% to close at 306.0. It is currently trading +25% above it's 52 week low of 243.58 and is down only -13% from it's 52 week high.
HUM showed a bearish trend over the last 3 months. During this period HUM fell by -6.91% and saw a maximum drawdown of -13.81%. There were 2 short signals during this period that returned a cumulative of +1.66% to investors.
HUM has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 19 Jul, 2016 to 7 Nov, 2018. Over the last 2 years 11 months and 3 days, HUM outperformed the SP500 index on 54% days.
During the last three months HUM was mostly loss making and delivered on average -0.1% per day. It's best return during this period (of +6.68%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -4.09%) was on Wednesday, 14 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 8 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -10.54% of investor capital.
During the last year HUM had 7 profitable months and 5 loss making months. HUM returned profits in fewer months than SP500 index. HUM significantly outperformed SP500 index in Jan 2018, when it returned +12.0% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HUM had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both HUM and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
HUM 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 HUM's volatility from 21 Sep, 2018 to 7 Dec, 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 HUM 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 HUM 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 HUM. Therefore, SP500 must receive a lower allocation than HUM in your portfolio. SP500 index usually has shorter drawdown period than HUM.
Based on your interest in HUM you may find it interesting to know that TWTR is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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