59.23 +0.25 (+0.42%) Sell

Looking to invest in RDSA? Consider it, because it showed marginal outperformance

14 min read

ROYAL DUTCH SHELL PLC (Foreign) outperformed the broader market on Thursday. It increased by +0.42% to close at 59.23. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing RDSA]

RDSA showed a bearish trend over the last 3 months. During this period RDSA fell by -8.14% and saw a maximum drawdown of -15.96%. There were 2 short signals during this period that returned a cumulative of +4.7% to investors.


RDSA has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 20 Jan, 2016 to 17 May, 2018. Over the last 2 years 11 months and 9 days, RDSA underperformed the SP500 index on 49% days. Which indicates that on days RDSA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months RDSA was mostly loss making and delivered on average -0.12% per day. It's best return during this period (of +2.8%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -4.32%) was on Friday, 23 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 14 Sep, 2018 and went on till 25 Sep, 2018. This bullish trend returned +7.7% to investors.

During the last year RDSA had 4 profitable months and 8 loss making months. RDSA returned profits in fewer months than SP500 index. RDSA significantly outperformed SP500 index in Apr 2018, when it returned +11.75% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. RDSA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from May 2018 to Aug 2018) during which period it delivered -5.59%. It is interesting to note that both RDSA and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Even though the quotes above come from some of the most intelligent people on Wall Street, the ideas behind them are both quite simple and insightful.

RDSA 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 RDSA's volatility from 14 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that RDSA has significant positive skewness in it's return distribution. This indicates that investors can expect RDSA to recover from drawdowns quickly. Which makes RDSA a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in RDSA derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in RDSA), two instruments that deserve special mention are TNDM and HEAR. They have significantly outperformed the overall market this year.

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