TRIP investors looking to preserve capital
17 Dec, 201813 min read
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TRIPADVISOR, INC. significantly underperformed on Monday. It returned -4.93% to close at 57.71. On a day when the overall market breadth was 34%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
TRIP is currently in a down trend. Over the last three months Buy-and-Hold has been a better strategy (returning +13.94%) for TRIP's investors than shorting it.
TRIP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, TRIP underperformed the SP500 index on 49% days. Which indicates that on days TRIP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
TRIP was profitable on 52% days in the last three months. During this time, it delivered on average +0.26% per day. It delivered it's best daily return of +15.26%, during this period, on Thursday, 8 Nov, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 10 Oct, 2018. The trend delivered -15.17% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +9.78% to investors.
On monthly basis, TRIP delivered profits in more months over the last year, than losses. TRIP delivered profits less regularly than SP500 index. TRIP significantly outperformed SP500 index in May 2018, when it returned +39.34% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TRIP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
Let him who would enjoy a good future waste none of his present.
-- Roger Babson
TRIP 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 TRIP's volatility from 2 Oct, 2018 to 8 Nov, 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 TRIP 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.
Investors trading in TRIP derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than TRIP. Therefore, SP500 must receive a lower allocation than TRIP in your portfolio. SP500 index usually has shorter drawdown period than TRIP.
Based on your interest in TRIP you may find it interesting to know that OPNT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to OPNT or sufficiently diversifying your portfolio.
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