Search for alternative investments is on for UGI investors as it underperforms
14 Dec, 201813 min read
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UGI CORP delivered massive losses on Friday. It lost -1.31% to close at 57.27. On a day when the overall market breadth was 35%, it closed higher than 7% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in UGI experienced a maximum drawdown of -5.2% over the last three months. It gained +3.88% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.
UGI has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, UGI outperformed the SP500 index on 54% days.
UGI was profitable on 57% days in the last three months. During this time, it delivered on average +0.06% per day. It delivered it's worst daily return of -2.75%, during this period, on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 15 Oct, 2018 and went on till 19 Oct, 2018. The bullish trend returned +4.74% to investors. This was followed by a bearish trend that started on 10 Dec, 2018 and ended on 14 Dec, 2018. This bearish trend lost -2.89% of investor capital.
UGI had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of UGI and SP500 index were the same. UGI significantly outperformed SP500 index in Apr 2018, when it returned +10.1% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. UGI had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +25.53%.
You must gain control over your money or the lack of it will forever control you.
-- Dave Ramsey
UGI 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 UGI's volatility from 18 Sep, 2018 to 14 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 UGI has significant positive skewness in it's return distribution. This indicates that investors can expect UGI to recover from drawdowns quickly. Which makes UGI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
UGI has more chance of extreme outcomes than the SP500 index. Therefore, UGI must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than UGI.
On a general note (since you are interested in UGI), two instruments that have delivered similar performance as UGI are HD and PLD. They are suitable as good alternative investment candidates that can diversify your portfolio.
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