78.09 -0.83 (-1.06%) Buy

Waiting to invest in ICE? Look for alternatives because it underperformed

13 min read

INTERCONTINENTAL EXCHANGE, INC. significantly underperformed on Tuesday. It delivered -1.06% to close at 78.09. It is currently trading +16% above it's 52 week low of 67.0 and is down only -4% from it's 52 week high.

[Themes containing ICE]

ICE showed a flat trend over the last 3 months. During this period ICE delivered +0.94% and saw a maximum drawdown of -7.28%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ICE till volatility reduces and a clear trend emerges.


ICE has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 30 Mar, 2016 to 27 Nov, 2018. Over the last 2 years 11 months and 7 days, ICE outperformed the SP500 index on 53% days.

ICE returned losses on 54% days in the last three months. During this time, it delivered on average +0.02% per day. It delivered it's best daily return of +5.39%, during this period, on Wednesday, 31 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 24 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -3.8% of investor capital.

The last 12 months saw ICE's investors making profits in 7 months and incurring losses in 5 months. ICE was less consistent in delivering monthly returs than SP500 index. ICE significantly outperformed SP500 index in Nov 2018, when it returned +6.07% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ICE had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ICE and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Behind every stock is a company. Find out what It's doing.

ICE 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 ICE's volatility from 24 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ICE 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.

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

On a general note (since you are interested in ICE), HQY is a small cap that deserves to be closely tracked for investment opportunities.

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