46.29 +1.0 (+2.16%) Sell

Are you evaluating investing in RIO? Consider as it managed to marginally outperform the broader market

13 min read

RIO delivered stellar performance today. On a longer term basis, investors in RIO TINTO LTD (Foreign) made 0.0% per day. Tuesday's performance of +2.16% was a significant outperformance compared to it's daily average.

[Themes containing RIO]

RIO showed a down trend over the last 3 months. During this period RIO lost -1.99% and saw a maximum drawdown of -13.22%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RIO till volatility reduces and a clear trend emerges.


RIO has been underperforming the SP500 index in recent time, after having outperformed till 6 Jun, 2018. Over the last 2 years 11 months and 7 days, RIO outperformed the SP500 index on 53% days.

RIO was profitable on 51% days in the last three months. During this time, it delivered on average -0.02% per day. It delivered it's worst daily return of -4.43%, during this period, on Friday, 23 Nov, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +8.91% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -6.31% of investor capital.

RIO had 5 profitable and 7 loss making months over the last year. During the last year, RIO underperformed SP500 index on monthly return basis. RIO was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -13.46% compared to -7.28% returned by SP500 index in Oct 2018. RIO had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -9.42%. It is interesting to note that both RIO and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you totally want to reduce risk, take no risk. Bury the money. Then you've got no risk at all.
-- Don Connelly

RIO is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in RIO's volatility from 2 Oct, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that RIO 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.

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

Based on your interest in RIO you may find it interesting to know that EPIX and APRN have both shown remarkable performance and deserve to be on every investors' watchlist.

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