25.62 -0.22 (-0.85%) Sell

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

13 min read

RENEWABLE ENERGY GROUP, INC. is a falling knife that can bleed you if you catch it on Thursday. It lost -0.85% to close at 25.62. It is currently trading +161% above it's 52 week low of 9.8 and is down only -18% from it's 52 week high.

[Themes containing REGI]

REGI showed a down trend over the last 3 months. During this period REGI lost -5.81% and saw a maximum drawdown of -20.4%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in REGI till volatility reduces and a clear trend emerges.


REGI has been underperforming the SP500 index in recent time, after having outperformed till 30 Oct, 2018. Over the last 2 years 11 months and 9 days, REGI outperformed the SP500 index on 51% days.

REGI was profitable on 53% days in the last three months. During this time, it delivered on average -0.03% per day. It delivered it's worst daily return of -13.71%, during this period, on Wednesday, 7 Nov, 2018. There was initially a bullish trend during this period which started on 11 Oct, 2018 and went on till 18 Oct, 2018. The bullish trend returned +18.11% to investors. This was followed by a bearish trend that started on 19 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -12.15% of investor capital.

REGI had 7 profitable and 5 loss making months over the last year. During the last year, REGI underperformed SP500 index on monthly return basis. REGI significantly outperformed SP500 index in Aug 2018, when it returned +58.06% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. REGI had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

Every time you borrow money, you're robbing your future self.
-- Nathan W. Morris

REGI is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in REGI's volatility from 17 Sep, 2018 to 7 Nov, 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 REGI has significant positive skewness in it's return distribution. This indicates that investors can expect REGI to recover from drawdowns quickly. Which makes REGI 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 REGI. Therefore, SP500 must receive a lower allocation than REGI in your portfolio. SP500 index usually has shorter drawdown period than REGI.

Based on your interest in REGI you may find it interesting to know that UNH and MSFT are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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