13.78 -0.46 (-3.37%) Sell

Looking to invest in RF? Avoid at the moment as it significantly underperformed

13 min read

REGIONS FINANCIAL CORP significantly underperformed on Thursday. It fell by -3.37% to close at 13.78. On a day when the overall market breadth was 35%, it closed higher than 7% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing RF]

RF showed a strong bearish trend over the last 3 months. During this period RF fell by -27.36% and saw a maximum drawdown of -29.3%. There were 2 short signals during this period that returned a cumulative of +19.9% to investors.


RF has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 7 Apr, 2016 to 6 Mar, 2018. Over the last 2 years 11 months and 9 days, RF outperformed the SP500 index on 49% days. Which indicates that on days RF outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months RF was mostly loss making and delivered on average -0.49% per day. It's best return during this period (of +3.88%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.25%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 25 Oct, 2018 and went on till 6 Nov, 2018. This bullish trend returned +13.35% to investors.

During the last year RF had 5 profitable months and 7 loss making months. RF returned profits in fewer months than SP500 index. RF was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -16.23% compared to -7.28% returned by SP500 index in Oct 2018. RF had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -31.44%. It is interesting to note that both RF and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it insures the possibility of satisfying a new desire when it arises.
-- Aristotle

RF 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 RF's volatility from 14 Sep, 2018 to 25 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 RF has significant positive skewness in it's return distribution. This indicates that investors can expect RF to recover from drawdowns quickly. Which makes RF a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in RF), if you are evaluating RF as an investment candidate, then you should read about TTEC which has delivered similar performance and can help diversify your portfolio.

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