UNITED RENTALS INC delivered stellar performance on Thursday. It gained +0.54% to close at 108.88. 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 -0.0002%.
URI showed a strong down trend over the last 3 months. During this period URI lost -33.99% and saw a maximum drawdown of -40.7%. There was a short signal during this period which returned +28.72%.
URI returned losses on 63% days in the last three months. During this time, it delivered on average -0.61% per day. It delivered it's worst daily return of -15.04%, during this period, on Thursday, 18 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +4.08% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -18.16% of investor capital.
URI had 5 profitable and 7 loss making months over the last year. During the last year, URI underperformed SP500 index on monthly return basis. URI was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -26.19% compared to -7.28% returned by SP500 index in Oct 2018. URI had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
The challenge is not to pick the best investment. The challenge is to pick the right investment.
-- Don Connelly
URI is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in URI's volatility from 27 Sep, 2018 to 24 Oct, 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 URI has significant positive skewness in it's return distribution. This indicates that investors can expect URI to recover from drawdowns quickly. Which makes URI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in URI derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
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