WEIBO CORP (Foreign) was among the worst performers on Tuesday. It fell by -0.25% to close at 60.62. On a day when the overall market breadth was 34%, it closed higher than 87% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.
WB showed a strong bearish trend over the last 3 months. During this period WB fell by -20.14% and saw a maximum drawdown of -29.72%. There were 2 short signals during this period that returned a cumulative of +8.65% to investors.
WB has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 14 Feb, 2018. Over the last 2 years 11 months and 14 days, WB outperformed the SP500 index on 52% days.
During the last three months WB was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +12.27%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.25%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -21.16% of investor capital.
During the last year WB had 2 profitable months and 10 loss making months. WB returned profits in fewer months than SP500 index. WB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -18.63% compared to -7.75% returned by SP500 index in Dec 2018. WB had a longer winning streak of losing months than SP500 index. It went down in 9 straight months (from Feb 2018 to Oct 2018) during which period it delivered -70.51%. It is interesting to note that both WB and SP500 index significantly outperform during months when quarterly/annual results are announced.
The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.
-- T.T. Munger
WB 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 WB's volatility from 27 Sep, 2018 to 1 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 WB has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
Investors trading in WB derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.
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