INCY investors hurt by serious losses
14 Dec, 201813 min read
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INCYTE CORP significantly underperformed on Friday. It fell by -1.55% to close at 66.25. On a day when the overall market breadth was 35%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in INCY experienced a maximum drawdown of -12.9% over the last three months. It fell by -1.15% during this bearish trending period. There were no long signals during this period, where the short signal generated profits of +1.15% for investors.
INCY has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 15 Mar, 2017 to 6 Aug, 2018. Over the last 2 years 11 months and 10 days, INCY underperformed the SP500 index on 48% days. Which indicates that on days INCY underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
INCY returned losses on 56% days in the last three months. During this time, it delivered on average +0.02% per day. It delivered it's worst daily return of -6.33%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +5.69%) started on 13 Nov, 2018 and went on till 16 Nov, 2018 while the bearish trend (which returned -4.72%) started on 27 Nov, 2018 and went on till 30 Nov, 2018.
During the last year INCY had 3 profitable months and 9 loss making months. INCY returned profits in fewer months than SP500 index. INCY was also a more risky investment than SP500 index as it's worst month in the last year, Apr 2018, returned -23.11% compared to -7.28% returned by SP500 index in Oct 2018. INCY had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jan 2018 to Apr 2018) during which period it delivered -41.45%.
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.
INCY is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in INCY's volatility from 25 Sep, 2018 to 1 Nov, 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 INCY 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.
SP500 index has more chance of extreme outcomes than INCY. Therefore, SP500 must receive a lower allocation than INCY in your portfolio. SP500 index usually has shorter drawdown period than INCY.
Based on your interest in INCY you may find it interesting to know that AYTU, SBOT and NSPR have all shown remarkable performance and qualify to be on every investor's watchlist.
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