RELIANCE STEEL & ALUMINUM CO showed marginal outperformance on Wednesday. It increased by +0.44% to close at 75.26. On a day when the overall market breadth was 35%, it closed higher than 15% of the market. In comparison, the benchmark SP500 index closed today at +0.54%.
RS showed a strong bearish trend over the last 3 months. During this period RS fell by -12.25% and saw a maximum drawdown of -14.64%. There was a short signal during this period which returned +12.25%.
RS has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 19 Jan, 2016 to 5 Dec, 2016. Over the last 2 years 11 months and 8 days, RS underperformed the SP500 index on 48% days. Which indicates that on days RS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months RS was mostly loss making and delivered on average -0.2% per day. It's best return during this period (of +3.51%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -4.89%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -7.38% of investor capital.
During the last year RS had 5 profitable months and 7 loss making months. RS returned profits in fewer months than SP500 index. RS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -8.25% compared to -7.28% returned by SP500 index in Oct 2018. RS had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -13.77%. It is interesting to note that both RS and SP500 index significantly outperform during months when quarterly/annual results are announced.
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.
-- Edmund Burke
RS 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 RS's volatility from 3 Oct, 2018 to 7 Dec, 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 RS 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.
Based on your interest in RS you may find it interesting to know that LULU is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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