75.78 -1.24 (-1.64%) Buy

Don't consider investing in OMC now, it is risky at the moment

13 min read

OMNICOM GROUP INC. significantly underperformed on Friday. It returned -1.64% to close at 75.78. On a day when the overall market breadth was 35%, it closed higher than 14% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing OMC]

OMC showed a up trend over the last 3 months. During this period OMC gained +8.63% and saw a maximum drawdown of -8.39%. There was a long signal during this period which returned +6.88%.


OMC has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, OMC underperformed the SP500 index on 46% days. Which indicates that on days OMC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

OMC was profitable on 57% days in the last three months. During this time, it delivered on average +0.14% per day. It delivered it's best daily return of +6.99%, during this period, on Tuesday, 16 Oct, 2018. There was initially a bullish trend during this period which started on 12 Oct, 2018 and went on till 22 Oct, 2018. The bullish trend returned +13.3% to investors. This was followed by a bearish trend that started on 29 Nov, 2018 and ended on 6 Dec, 2018. This bearish trend lost -2.65% of investor capital.

On monthly basis, OMC delivered profits and losses in equal number of months. OMC delivered profits less regularly than SP500 index. OMC significantly outperformed SP500 index in Oct 2018, when it returned +9.17% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. OMC had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both OMC and SP500 index significantly outperform during months when quarterly/annual results are announced.

"We ignore outlooks and forecasts.. we're lousy at it and we admit it .. everyone else is lousy too, but most people won't admit it.

OMC 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 OMC's volatility from 18 Sep, 2018 to 16 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 OMC has significant positive skewness in it's return distribution. This indicates that investors can expect OMC to recover from drawdowns quickly. Which makes OMC 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 OMC. Therefore, SP500 must receive a lower allocation than OMC in your portfolio. OMC usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in OMC), AMRH has performed really well and deserves to be closely tracked for investment opportunities.

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