NEXTERA ENERGY PARTNERS, LP ranked among the worst performers on Friday. It lost -1.55% to close at 45.24. On a day when the overall market breadth was 35%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in NEP experienced a maximum drawdown of -12.19% over the last three months. It lost -6.82% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.
During the last three months NEP was mostly loss making and delivered on average -0.1% per day. It's best return during this period (of +7.7%) was on Friday, 16 Nov, 2018. While it's worst loss in the same period (of -4.69%) was on Wednesday, 14 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +8.07% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -8.3% of investor capital.
NEP had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of NEP and SP500 index were the same. NEP was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -12.63% compared to -7.28% returned by SP500 index in Oct 2018. NEP had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +22.39%. It is interesting to note that both NEP and SP500 index significantly outperform during months when quarterly/annual results are announced.
"The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market.
NEP 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 surge in NEP's volatility from 19 Sep, 2018 to 16 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 NEP 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.
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