NUVA shows sign of weakness as investors do cost averaging
12 Dec, 201813 min read
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NUVASIVE INC is looking better than most other alternatives today. It grew by +0.02% to close at 56.62. During the last week it lost -2.14% and saw a maximum drawdown of -3.16% before bouncing back.
Buy-and-Hold investors in NUVA experienced a maximum drawdown of -21.96% over the last three months. It lost -20.71% during this strong 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. The net profit from Short signals was +12.57%.
NUVA has been underperforming the SP500 index in recent time, after having outperformed till 20 Jul, 2017. Over the last 2 years 11 months and 8 days, NUVA underperformed the SP500 index on 48% days. Which indicates that on days NUVA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months NUVA was mostly loss making and delivered on average -0.34% per day. It's best return during this period (of +3.33%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -10.14%) was on Wednesday, 31 Oct, 2018. There was initially a bullish trend during this period which started on 13 Nov, 2018 and went on till 16 Nov, 2018. The bullish trend returned +6.99% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -12.59% of investor capital.
NUVA had 7 profitable and 5 loss making months over the last year. During the last year, NUVA underperformed SP500 index on monthly return basis. NUVA was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.18% compared to -7.28% returned by SP500 index in Oct 2018. NUVA had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.
George Soros is one of the few characters from the world of finance who deserves to be called larger-than-life.
-- Gary Weiss
NUVA 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 surge in NUVA's volatility from 13 Sep, 2018 to 19 Oct, 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 NUVA 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 NUVA. Therefore, SP500 must receive a lower allocation than NUVA in your portfolio. SP500 index usually has shorter drawdown period than NUVA.
On a general note (since you are interested in NUVA), two instruments that deserve special mention are AYTU and EPIX. They have significantly outperformed the overall market.
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