PACWEST BANCORP

32.9 -0.04 (-0.12%) Sell

PACW investors looking to exit as part of sectoral rotation

13 min read

PACWEST BANCORP has destroyed investor wealth today. It delivered -0.12% to close at 32.9. During the last week it delivered -7.19% and saw a maximum drawdown of -7.19%.

[Themes containing PACW]

PACW is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +32.22% for investors.

Trend

PACW has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Jan, 2017 to 13 Dec, 2018. Over the last 2 years 11 months and 14 days, PACW underperformed the SP500 index on 49% days. Which indicates that on days PACW underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PACW was mostly loss making and delivered on average -0.65% per day. It's best return during this period (of +4.34%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -5.48%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 16 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -15.45% of investor capital.

The last 12 months saw PACW's investors making profits in 5 months and incurring losses in 7 months. PACW was less consistent in delivering monthly returs than SP500 index. PACW was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -18.24% compared to -7.75% returned by SP500 index in Dec 2018. PACW had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -39.25%. It is interesting to note that both PACW and SP500 index significantly outperform during months when quarterly/annual results are announced.

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

PACW is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in PACW's volatility from 25 Sep, 2018 to 10 Dec, 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 PACW has significant positive skewness in it's return distribution. This indicates that investors can expect PACW to recover from drawdowns quickly. Which makes PACW a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

PACW has more chance of extreme outcomes than the SP500 index. Therefore, PACW must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than PACW.

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

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