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.
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%.
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.
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).
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