6.26 +0.05 (+0.81%) Sell

Don't go profit booking on VLRS now, it delivered a decent return

13 min read

CONTROLADORA VUELA COMPANIA DE AVIACION, S.A.B. DE C.V. (Foreign) outperformed on Friday. It surged by +0.81% to close at 6.26. It is currently trading -32% below it's 52 week high of 9.25.

[Themes containing VLRS]

VLRS showed a strong bearish trend over the last 3 months. During this period VLRS delivered -22.14% and saw a maximum drawdown of -29.63%. There was a short signal during this period which returned +4.13%.


VLRS has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 2 Mar, 2016 to 11 Jun, 2018. Over the last 2 years 11 months and 3 days, VLRS underperformed the SP500 index on 52% days.

VLRS returned losses on 59% days in the last three months. During this time, it delivered on average -0.35% per day. It delivered it's worst daily return of -9.79%, during this period, on Friday, 28 Sep, 2018. The longest stort-term trend during this period was 5 losing days, which started on 14 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -8.75% of investor capital.

The last 12 months saw VLRS's investors making profits in 5 months and incurring losses in 7 months. VLRS was less consistent in delivering monthly returs than SP500 index. VLRS significantly outperformed SP500 index in Jul 2018, when it returned +47.7% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. VLRS had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Mar 2018 to Jun 2018) during which period it delivered -50.67%.

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VLRS is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in VLRS's volatility from 26 Sep, 2018 to 29 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 VLRS has positive skewness in it's return distribution. This indicates that investors can expect VLRS to make attempts to recover from drawdowns quickly. Which makes VLRS a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

Based on your interest in VLRS you may find it interesting to know that PMD, PAYC and ANGO have all performed similar to VLRS and qualify as alternative investment candidates that must be evaluated for diversification.

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