51.53 +0.04 (+0.08%) Sell

Don't go profit booking on RP now, it delivered a decent return

13 min read

REALPAGE INC managed to marginally outperform the broader market on Wednesday. It gained +0.08% to close at 51.53. It is currently trading -21% below it's 52 week high of 65.9.

[Themes containing RP]

RP showed a strong down trend over the last 3 months. During this period RP returned -17.55% and saw a maximum drawdown of -30.83%. There was a short signal during this period which returned +11.37%.


RP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 8 days, RP outperformed the SP500 index on 54% days.

RP was profitable on 50% days in the last three months. During this time, it delivered on average -0.27% per day. It delivered it's worst daily return of -6.44%, during this period, on Monday, 19 Nov, 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 -11.2% losses to investors. This was followed by a bullish trend that started on 20 Nov, 2018 and ended on 26 Nov, 2018. This bullish trend delivered +6.88% to investors.

On monthly basis, RP delivered profits and losses in equal number of months. RP delivered profits less regularly than SP500 index. RP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.16% compared to -7.28% returned by SP500 index in Oct 2018. RP 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 -16.94%. It is interesting to note that both RP 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.

RP 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 RP's volatility from 13 Sep, 2018 to 12 Nov, 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 RP has significant positive skewness in it's return distribution. This indicates that investors can expect RP to recover from drawdowns quickly. Which makes RP 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 RP. Therefore, SP500 must receive a lower allocation than RP in your portfolio. RP usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in RP), two small cap instruments that deserve special mention are HQY and AAXN. They have significantly outperformed the overall market.

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