9.38 -0.31 (-3.3%) Sell

RDC is a falling knife, continues to bleed every investor trying to catch it

13 min read

ROWAN COMPANIES PLC is a falling knife that can bleed you if you catch it on Monday. It fell by -3.3% to close at 9.38. On a day when the overall market breadth was 34%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing RDC]

RDC showed a strong bearish trend over the last 3 months. During this period RDC fell by -42.24% and saw a maximum drawdown of -54.69%. There was a short signal during this period which returned +41.56%.


RDC has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 12 Dec, 2016 to 14 Dec, 2018. One must note that RDC 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, RDC underperformed the SP500 index on 52% days.

RDC returned losses on 58% days in the last three months. During this time, it delivered on average -0.8% per day. It delivered it's worst daily return of -9.18%, during this period, on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 9 losing days, which started on 4 Dec, 2018 and ended on 17 Dec, 2018. This bearish trend lost -41.31% of investor capital.

During the last year RDC had 4 profitable months and 8 loss making months. RDC returned profits in fewer months than SP500 index. RDC significantly outperformed SP500 index in Sep 2018, when it returned +34.12% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. RDC had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages.
-- Henry Ford

RDC 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 RDC's volatility from 18 Sep, 2018 to 7 Dec, 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 RDC 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.

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

On a general note (since you are interested in RDC), three instruments that have performed similar to RDC are VREX, MCRN and TLND. They must all be evaluated as alternative investment options and for diversification.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter