176.53 -0.47 (-0.27%) Buy

Search for alternative investments is on for RHT investors as it ranked worse than it's peers

13 min read

RED HAT INC delivered massive losses on Tuesday. It lost -0.27% to close at 176.53. It is currently trading +51% above it's 52 week low of 116.68 and is down only -1% from it's 52 week high.

[Themes containing RHT]

RHT is currently in a up trend. The previous long signal in RHT has not been profitable for investors in general. If you are invested in RHT at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


RHT has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, RHT outperformed the SP500 index on 54% days.

RHT was profitable on 50% days in the last three months. During this time, it delivered on average +0.38% per day. It delivered it's best daily return of +45.38%, during this period, on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -10.13% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 9 Nov, 2018. This bullish trend delivered +0.87% to investors.

RHT had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of RHT and SP500 index were the same. RHT significantly outperformed SP500 index in Oct 2018, when it returned +29.02% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. RHT had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both RHT and SP500 index significantly outperform during months when quarterly/annual results are announced.

Invest like a bull, sit like a bear and watch like an eagle. (mantra for long term investing)
-- Vijay Kedia

RHT 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 fall in RHT's volatility from 29 Oct, 2018 to 21 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 RHT 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.

Investors trading in RHT derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

Based on your interest in RHT you may find it interesting to know that EHC is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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