Stop-loss on the minds of OSIS investors as it performed worse than the broader market
17 Dec, 201813 min read
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OSI SYSTEMS INC trailed the broader market today. It fell by -0.08% to close at 72.44. During the last week it fell by -2.41% and saw a maximum drawdown of -2.71% before bouncing back.
Buy-and-Hold investors in OSIS experienced a maximum drawdown of -13.74% over the last three months. It fell by -5.42% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.
OSIS has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 15 Jan, 2016 to 2 Feb, 2018. Over the last 2 years 11 months and 10 days, OSIS underperformed the SP500 index on 49% days. Which indicates that on days OSIS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months OSIS was mostly loss making and delivered on average -0.08% per day. It's best return during this period (of +3.81%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -4.35%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -7.39% of investor capital.
During the last year OSIS had 8 profitable months and 4 loss making months. Profitable number of months of OSIS and SP500 index were the same. OSIS significantly outperformed SP500 index in Jun 2018, when it returned +12.76% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. OSIS had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both OSIS and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Watch your finances like a hawk.
OSIS is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in OSIS's volatility from 19 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that OSIS has significant positive skewness in it's return distribution. This indicates that investors can expect OSIS to recover from drawdowns quickly. Which makes OSIS 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 OSIS. Therefore, SP500 must receive a lower allocation than OSIS in your portfolio. OSIS usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in OSIS), two instruments that deserve special mention are PRQR and TPNL. They have significantly outperformed the overall market this year.
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