49.87 -0.2 (-0.4%) Sell

ITT investors incur serious losses

13 min read

ITT was among the worst performers today. On a longer term basis, investors in ITT INC. made +0.06% per day. Tuesday's performance of -0.4% was a underperformance compared to it's daily average.

[Themes containing ITT]

Buy-and-Hold investors in ITT experienced a maximum drawdown of -24.55% over the last three months. It delivered -14.69% during this strong bearish 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 +7.47%.


ITT has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Aug, 2016 to 6 Aug, 2018. Over the last 2 years 11 months and 7 days, ITT outperformed the SP500 index on 49% days. Which indicates that on days ITT outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

ITT returned losses on 55% days in the last three months. During this time, it delivered on average -0.23% per day. It delivered it's best daily return of +7.98%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 4 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -15.02% of investor capital.

The last 12 months saw ITT's investors making profits in 8 months and incurring losses in 4 months. During the last year, ITT and SP500 index had the same number of profitable months. ITT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.25% compared to -7.28% returned by SP500 index in Oct 2018. ITT and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both ITT and SP500 index significantly outperform during months when quarterly/annual results are announced.

I hate weekends because there is no stock market.
-- Rene Rivkin

ITT 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 ITT's volatility from 13 Sep, 2018 to 2 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 ITT 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 ITT. Therefore, SP500 must receive a lower allocation than ITT in your portfolio. SP500 index usually has shorter drawdown period than ITT.

On a general note (since you are interested in ITT), two instruments that have been extremely volatile in recent times are OPNT and ICPT. Investors in these instruments should consider reducing their exposure (to OPNT and ICPT) and diversifying their portfolios.

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