PEMBINA PIPELINE CORP (FOREIGN)

32.64 +0.24 (+0.74%) Sell

PBA investors hold onto their investments as it marginally outperforms

13 min read

PEMBINA PIPELINE CORP (Foreign) performed better than the broader market on Wednesday. It returned +0.74% to close at 32.64. On a day when the overall market breadth was 35%, it closed higher than 68% of the market. In comparison, the benchmark SP500 index closed today at +0.54%.

[Themes containing PBA]

PBA is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for PBA's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -1.27%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to PBA.

Trend

PBA has been underperforming the SP500 index in recent time, after having outperformed till 7 Jun, 2016. Over the last 2 years 11 months and 8 days, PBA outperformed the SP500 index on 51% days.

During the last three months PBA was mostly loss making and delivered on average -0.01% per day. It's best return during this period (of +3.81%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -3.09%) was on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 24 Oct, 2018 and went on till 31 Oct, 2018. The trend delivered -6.6% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +8.01% to investors.

On monthly basis, PBA delivered losses in more months over the last year, than profits. PBA delivered profits less regularly than SP500 index. PBA significantly outperformed SP500 index in May 2018, when it returned +9.13% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PBA had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -15.3%. It is interesting to note that both PBA and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.
-- Benjamin Franklin

PBA 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 PBA's volatility from 13 Sep, 2018 to 5 Nov, 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 PBA 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.

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

On a general note (since you are interested in PBA), V is a large cap that deserves to be closely tracked for investment opportunities.

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