VALVOLINE INC

18.96 +0.17 (+0.9%) Sell

Looking to invest in VVV? Consider it, because it showed marginal outperformance

13 min read

VALVOLINE INC outperformed the broader market on Tuesday. It increased by +0.9% to close at 18.96. On a day when the overall market breadth was 34%, it closed higher than 69% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing VVV]

VVV showed a strong bearish trend over the last 3 months. During this period VVV fell by -11.69% and saw a maximum drawdown of -13.61%. There were 2 short signals during this period that returned a cumulative of +3.53% to investors.

Trend

VVV has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Sep, 2016 to 9 Oct, 2018. Over the last 2 years and 3 months, VVV underperformed the SP500 index on 47% days. Which indicates that on days VVV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months VVV was mostly loss making and delivered on average -0.18% per day. It's best return during this period (of +5.09%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -8.37%) was on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -6.98% of investor capital.

During the last year VVV had 4 profitable months and 8 loss making months. VVV returned profits in fewer months than SP500 index. VVV was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -10.1% compared to -7.75% returned by SP500 index in Dec 2018. VVV had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jan 2018 to Apr 2018) during which period it delivered -19.64%.

"Under capitalism, man exploits man. Under communism, it's just the opposite.

VVV 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 VVV's volatility from 28 Sep, 2018 to 8 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 VVV has significant positive skewness in it's return distribution. This indicates that investors can expect VVV to recover from drawdowns quickly. Which makes VVV a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in VVV you may find it interesting to know that GNK 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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