75.99 -2.75 (-3.61%) Sell

Are you evaluating investing in VLO? Avoid as it significantly underperformed

13 min read

VALERO ENERGY CORP significantly underperformed on Friday. It lost -3.61% to close at 75.99. 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 -0.0233%.

[Themes containing VLO]

VLO showed a strong down trend over the last 3 months. During this period VLO lost -34.07% and saw a maximum drawdown of -36.67%. There was a short signal during this period which returned +34.07%.


VLO has been underperforming the SP500 index in recent time, after having outperformed till 4 Jun, 2018. Over the last 2 years 11 months and 3 days, VLO underperformed the SP500 index on 48% days. Which indicates that on days VLO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months VLO was mostly loss making and delivered on average -0.63% per day. It's best return during this period (of +3.87%) was on Wednesday, 3 Oct, 2018. While it's worst loss in the same period (of -10.28%) was on Friday, 19 Oct, 2018. There was initially a bullish trend during this period which started on 20 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +6.29% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -11.37% of investor capital.

VLO had 5 profitable and 7 loss making months over the last year. During the last year, VLO underperformed SP500 index on monthly return basis. VLO significantly outperformed SP500 index in Apr 2018, when it returned +21.16% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. VLO had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -41.08%. It is interesting to note that both VLO and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth consists not in having great possessions, but in having few wants.
-- Epictetus

VLO 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 VLO's volatility from 14 Sep, 2018 to 26 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

Investors trading in VLO derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in VLO), TYHT has performed really well and deserves to be closely tracked for investment opportunities.

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