21.04 +0.14 (+0.67%) Sell

SLRC investors update their stop-losses higher

13 min read

SOLAR CAPITAL LTD. outperformed the broader market on Tuesday. It increased by +0.67% to close at 21.04. It is currently trading +5% above it's 52 week low of 19.97 and is down only -4% from it's 52 week high.

[Themes containing SLRC]

Buy-and-Hold investors in SLRC experienced a maximum drawdown of -7.4% over the last three months. It fell by -3.44% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +0.66%.


SLRC has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Nov, 2016 to 8 Oct, 2018. Over the last 2 years 11 months and 7 days, SLRC underperformed the SP500 index on 49% days. Which indicates that on days SLRC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SLRC was mostly loss making and delivered on average -0.05% per day. It's best return during this period (of +2.75%) was on Tuesday, 9 Oct, 2018. While it's worst loss in the same period (of -2.62%) was on Thursday, 6 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 13 Nov, 2018 and went on till 19 Nov, 2018. This bullish trend returned +1.89% to investors.

During the last year SLRC had 7 profitable months and 5 loss making months. SLRC returned profits in fewer months than SP500 index. SLRC significantly outperformed SP500 index in May 2018, when it returned +6.04% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SLRC had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both SLRC and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Financial crises are like fireworks: they illuminate the sky even as they go pop.

SLRC 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 SLRC's volatility from 27 Sep, 2018 to 6 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SLRC has significant positive skewness in it's return distribution. This indicates that investors can expect SLRC to recover from drawdowns quickly. Which makes SLRC 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 SLRC. Therefore, SP500 must receive a lower allocation than SLRC in your portfolio. SLRC usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in SLRC), if you are evaluating SLRC as an investment candidate, then you should read about BNS which has delivered similar performance and can help diversify your portfolio.

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