8.55 -0.06 (-0.7%) Buy

Search for alternative investments is on for TEF investors as it shows weakness

13 min read

TEF ranked among the worst performers today. On a longer term basis, investors in TELEFONICA S A (Foreign) made -0.02% per day. Tuesday's performance of -0.7% was a underperformance compared to it's daily average.

[Themes containing TEF]

Buy-and-Hold investors in TEF experienced a maximum drawdown of -5.49% over the last three months. It surged by +9.06% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


TEF has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Mar, 2016 to 2 Oct, 2018. Over the last 2 years 11 months and 7 days, TEF underperformed the SP500 index on 52% days.

TEF was profitable on 50% days in the last three months. During this time, it delivered on average +0.15% per day. It delivered it's best daily return of +4.93%, during this period, on Monday, 26 Nov, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 26 Nov, 2018 and went on till 3 Dec, 2018. This bullish trend returned +8.21% to investors.

The last 12 months saw TEF's investors making profits in 6 months and incurring losses in 6 months. TEF was less consistent in delivering monthly returs than SP500 index. TEF was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -13.3% compared to -7.28% returned by SP500 index in Oct 2018. TEF had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both TEF and SP500 index significantly outperform during months when quarterly/annual results are announced.

Anyone who thinks there's safety in numbers hasn't looked at the stock market pages.
-- Irene Peter

TEF 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 TEF's volatility from 13 Sep, 2018 to 11 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 TEF has significant positive skewness in it's return distribution. This indicates that investors can expect TEF to recover from drawdowns quickly. Which makes TEF 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 TEF. Therefore, SP500 must receive a lower allocation than TEF in your portfolio. TEF usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in TEF), three instruments that deserve special mention are NFEC, TPNL and I. They have all outperformed the market and must be closely watched for investment opportunities.

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