2441.93 -1.84 (-0.08%) Buy

NVR investors herd to book profits while the going is good

13 min read

NVR INC significantly underperformed on Thursday. It returned -0.08% to close at 2441.93. It is currently trading -34% below it's 52 week high of 3700.0.

[Themes containing NVR]

Buy-and-Hold investors in NVR experienced a maximum drawdown of -21.37% over the last three months. It returned -6.83% 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. The net profit from Short signals was +8.38%.


NVR has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, NVR outperformed the SP500 index on 51% days.

During the last three months NVR was mostly loss making and delivered on average -0.09% per day. It's best return during this period (of +4.97%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -3.92%) was on Friday, 2 Nov, 2018. There was initially a bearish trend during this period which started on 19 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -5.81% losses to investors. This was followed by a bullish trend that started on 15 Nov, 2018 and ended on 23 Nov, 2018. This bullish trend delivered +5.75% to investors.

On monthly basis, NVR delivered losses in more months over the last year, than profits. NVR delivered profits less regularly than SP500 index. NVR was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -10.54% compared to -7.28% returned by SP500 index in Oct 2018. NVR had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from May 2018 to Oct 2018) during which period it delivered -32.3%.

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NVR 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 NVR's volatility from 17 Sep, 2018 to 1 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 NVR 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 NVR. Therefore, SP500 must receive a lower allocation than NVR in your portfolio. SP500 index usually has shorter drawdown period than NVR.

Based on your interest in NVR you may find it interesting to know that IMTE is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to IMTE or sufficiently diversifying your portfolio.

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