Are you evaluating investing in NGD? Wait as it trailed the broader market
14 Dec, 201813 min read
Share with friends 
NEW GOLD INC. (Foreign) was among the worst performers on Friday. It lost -1.37% to close at 0.79. On a day when the overall market breadth was 35%, it closed higher than 3% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
NGD showed a strong down trend over the last 3 months. During this period NGD lost -27.52% and saw a maximum drawdown of -36.55%. There were 2 short signals during this period that returned a cumulative of +6.73% to investors.
NGD has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, NGD underperformed the SP500 index on 52% days.
During the last three months NGD was mostly loss making and delivered on average -0.42% per day. It's best return during this period (of +11.75%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -14.66%) was on Monday, 24 Sep, 2018. There was initially a bearish trend during this period which started on 20 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -35.11% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +10.07% to investors.
NGD had 2 profitable and 10 loss making months over the last year. During the last year, NGD underperformed SP500 index on monthly return basis. NGD was also a more risky investment than SP500 index as it's worst month in the last year, Jul 2018, returned -39.02% compared to -7.28% returned by SP500 index in Oct 2018. NGD had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Apr 2018 to Sep 2018) during which period it delivered -102.68%.
Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we've got 24 hours each.
-- Christopher Rice
NGD 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 NGD's volatility from 17 Sep, 2018 to 19 Oct, 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 NGD has significant positive skewness in it's return distribution. This indicates that investors can expect NGD to recover from drawdowns quickly. Which makes NGD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
SP500 index has more chance of extreme outcomes than NGD. Therefore, SP500 must receive a lower allocation than NGD in your portfolio. SP500 index usually has shorter drawdown period than NGD.
On a general note (since you are interested in NGD), two instruments that have delivered similar performance as NGD are ALN and XNCR. They are suitable as good alternative investment candidates that can diversify your portfolio.
... 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