RPD is a falling knife, continues to bleed every investor trying to catch it
17 Dec, 201813 min read
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RAPID7, INC. was among the worst performers today. It returned -7.31% to close at 30.32. It's recent 5 day performance has been -3.28%, +0.65%, +4.19%, -1.68% and +4.53%.
RPD is currently in a down trend. The current bearish signal has generated a profit of +7.7% for investors in the last three months.
RPD has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, RPD outperformed the SP500 index on 52% days.
RPD returned losses on 54% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's worst daily return of -14.58%, during this period, on Monday, 19 Nov, 2018. There was initially a bearish trend during this period which started on 8 Nov, 2018 and went on till 14 Nov, 2018. The trend delivered -14.91% losses to investors. This was followed by a bullish trend that started on 28 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +15.87% to investors.
On monthly basis, RPD delivered profits and losses in equal number of months. RPD delivered profits less regularly than SP500 index. RPD significantly outperformed SP500 index in Aug 2018, when it returned +37.18% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. RPD had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -15.77%. It is interesting to note that both RPD and SP500 index significantly outperform during months when quarterly/annual results are announced.
I'm a great believer in luck, and I find the harder I work the more I have of it.
-- Thomas Jefferson
RPD 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 RPD's volatility from 28 Sep, 2018 to 19 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that RPD has significant positive skewness in it's return distribution. This indicates that investors can expect RPD to recover from drawdowns quickly. Which makes RPD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
RPD has more chance of extreme outcomes than the SP500 index. Therefore, RPD must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than RPD.
Based on your interest in RPD you may find it interesting to know that EVC has delivered similar performance as RPD and can be considered as an alternative investment candidate (to RPD).
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