TRANSCANADA CORP (FOREIGN)

38.11 -0.85 (-2.23%) Buy

TRP investors looking to cut their losses short

13 min read

TRANSCANADA CORP (Foreign) is a falling knife that can bleed you if you catch it on Tuesday. It fell by -2.23% to close at 38.11. It is currently trading -23% below it's 52 week high of 49.52.

[Themes containing TRP]

Buy-and-Hold investors in TRP experienced a maximum drawdown of -10.7% over the last three months. It fell by -9.39% 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 +0.4%.

Trend

TRP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 22 Sep, 2016 to 27 Sep, 2018. Over the last 2 years 11 months and 14 days, TRP underperformed the SP500 index on 48% days. Which indicates that on days TRP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

TRP returned losses on 54% 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 +3.02%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +5.75%) started on 14 Nov, 2018 and went on till 21 Nov, 2018 while the bearish trend (which returned -8.08%) started on 22 Oct, 2018 and went on till 29 Oct, 2018.

During the last year TRP had 4 profitable months and 8 loss making months. TRP returned profits in fewer months than SP500 index. TRP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -8.87% compared to -7.75% returned by SP500 index in Dec 2018. TRP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -17.22%. It is interesting to note that both TRP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Traditionally, the sample is always better than the stock you deliver to the store.
-- Calvin Klein

TRP 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 TRP's volatility from 25 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that TRP has significant positive skewness in it's return distribution. This indicates that investors can expect TRP to recover from drawdowns quickly. Which makes TRP a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

TRP has more chance of extreme outcomes than the SP500 index. Therefore, TRP must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than TRP.

Based on your interest in TRP you may find it interesting to know that NVCN and IX are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Following
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter