16.43 -1.14 (-6.96%) Sell

Prayers for PE investors as it delivered massive losses

13 min read

PARSLEY ENERGY, INC. was among the worst performers on Friday. It delivered -6.96% to close at 16.43 which is it's 52 week low, down -50% from it's 52 week high.

[Themes containing PE]

Buy-and-Hold investors in PE experienced a maximum drawdown of -46.48% over the last three months. It delivered -40.79% during this strong 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. The net profit from Short signals was +34.75%.


PE has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 2 Dec, 2016 to 14 Dec, 2018. One must note that PE is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 10 days, PE underperformed the SP500 index on 49% days. Which indicates that on days PE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PE was mostly loss making and delivered on average -0.79% per day. It's best return during this period (of +3.54%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.16%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -19.24% of investor capital.

The last 12 months saw PE's investors making profits in 6 months and incurring losses in 6 months. PE was less consistent in delivering monthly returs than SP500 index. PE was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -22.55% compared to -7.28% returned by SP500 index in Oct 2018. PE had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Average investors who try to do a lot of trading will only make their brokers rich.
-- Michael Jenson

PE 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 PE's volatility from 24 Sep, 2018 to 14 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 PE has significant positive skewness in it's return distribution. This indicates that investors can expect PE to recover from drawdowns quickly. Which makes PE 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 PE. Therefore, SP500 must receive a lower allocation than PE in your portfolio. SP500 index usually has shorter drawdown period than PE.

Based on your interest in PE you may find it interesting to know that APRN has shown remarkable performance and deserves to be on every investors' watchlist.

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