KROGER CO

28.92 -0.62 (-2.13%) Sell

Want to invest in KR? Avoid as it significantly underperformed

13 min read

KROGER CO significantly underperformed on Monday. It returned -2.13% to close at 28.92. On a day when the overall market breadth was 34%, it closed higher than 10% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing KR]

KR showed a flat trend over the last 3 months. During this period KR returned +0.14% and saw a maximum drawdown of -10.12%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in KR till volatility reduces and a clear trend emerges.

Trend

KR has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, KR underperformed the SP500 index on 51% days.

During the last three months KR was mostly profitable and delivered on average +0.02% per day. It's best return during this period (of +6.59%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -4.87%) was on Tuesday, 9 Oct, 2018. There was initially a bearish trend during this period which started on 9 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -8.49% losses to investors. This was followed by a bullish trend that started on 2 Nov, 2018 and ended on 9 Nov, 2018. This bullish trend delivered +6.86% to investors.

On monthly basis, KR delivered profits and losses in equal number of months. KR delivered profits less regularly than SP500 index. KR significantly outperformed SP500 index in Jun 2018, when it returned +16.93% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. KR 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 KR and SP500 index significantly outperform during months when quarterly/annual results are announced.

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.
-- Robert G. Allen

KR is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in KR'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 KR has significant positive skewness in it's return distribution. This indicates that investors can expect KR to recover from drawdowns quickly. Which makes KR a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in KR derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

Based on your interest in KR you may find it interesting to know that LULU is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Following
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter