Want to invest in JPM? Avoid as it was among the worst performers
18 Dec, 201813 min read
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JPMORGAN CHASE & CO was among the worst performers today. It returned -0.47% to close at 98.54. It's recent 5 day performance has been -1.28%, -0.82%, +0.1%, +0.65% and -0.98%.
JPM showed a strong down trend over the last 3 months. During this period JPM returned -16.22% and saw a maximum drawdown of -16.94%. There were 2 short signals during this period that returned a cumulative of +9.65% to investors.
JPM has been underperforming the SP500 index in recent time, after having outperformed till 26 Feb, 2018. Over the last 2 years 11 months and 14 days, JPM outperformed the SP500 index on 51% days.
JPM returned losses on 59% days in the last three months. During this time, it delivered on average -0.27% per day. It delivered it's worst daily return of -4.46%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 28 Sep, 2018. The trend delivered -4.98% losses to investors. This was followed by a bullish trend that started on 1 Oct, 2018 and ended on 4 Oct, 2018. This bullish trend delivered +2.13% to investors.
On monthly basis, JPM delivered losses in more months over the last year, than profits. JPM delivered profits less regularly than SP500 index. JPM was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -11.38% compared to -7.75% returned by SP500 index in Dec 2018. JPM had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -5.79%. It is interesting to note that both JPM and SP500 index significantly outperform during months when quarterly/annual results are announced.
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JPM is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in JPM's volatility from 19 Sep, 2018 to 3 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that JPM has significant positive skewness in it's return distribution. This indicates that investors can expect JPM to recover from drawdowns quickly. Which makes JPM a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in JPM derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.
JPM has more chance of extreme outcomes than the SP500 index. Therefore, JPM must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than JPM.
On a general note (since you are interested in JPM), RGSE has performed really well and deserves to be closely tracked for investment opportunities.
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