SELECTIVE INSURANCE GROUP INC delivered good returns on Friday. It grew by +0.18% to close at 62.96. On a day when the overall market breadth was 35%, it closed higher than 82% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
SIGI showed a down trend over the last 3 months. During this period SIGI returned -3.51% and saw a maximum drawdown of -11.63%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SIGI till volatility reduces and a clear trend emerges.
During the last three months SIGI delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.98%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -3.97%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 16 Oct, 2018 and went on till 22 Oct, 2018. The bullish trend returned +5.33% to investors. This was followed by a bearish trend that started on 31 Oct, 2018 and ended on 2 Nov, 2018. This bearish trend lost -5.07% of investor capital.
On monthly basis, SIGI delivered profits and losses in equal number of months. SIGI delivered profits less regularly than SP500 index. SIGI significantly outperformed SP500 index in Aug 2018, when it returned +7.36% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SIGI had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Apr 2018 to Jun 2018) during which period it delivered -7.72%. It is interesting to note that both SIGI and SP500 index significantly outperform during months when quarterly/annual results are announced.
Never invest emergency savings in the stock market.
-- Suze Orman
SIGI 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 SIGI's volatility from 18 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that SIGI 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.
On a general note (since you are interested in SIGI), three small cap instruments that deserve special mention are EHC, AAXN and KEYS. They have all outperformed the market and must be closely watched for investment opportunities.
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