18.13 +0.18 (+1.0%) Buy

WBK investors making the most while the sun shines

13 min read

WESTPAC BANKING CORP (Foreign) delivered stellar performance today. It gained +1.0% to close at 18.13. During the last week it lost -3.36% and saw a maximum drawdown of -4.32% before bouncing back.

[Themes containing WBK]

Buy-and-Hold investors in WBK experienced a maximum drawdown of -12.65% over the last three months. It lost -8.43% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


WBK has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, WBK underperformed the SP500 index on 49% days. Which indicates that on days WBK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

WBK returned losses on 58% days in the last three months. During this time, it delivered on average -0.13% per day. It delivered it's worst daily return of -3.31%, during this period, on Friday, 9 Nov, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -8.27% losses to investors. This was followed by a bullish trend that started on 21 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +6.06% to investors.

WBK had 4 profitable and 8 loss making months over the last year. During the last year, WBK underperformed SP500 index on monthly return basis. WBK was also a less risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -6.65% compared to -7.28% returned by SP500 index in Oct 2018. WBK had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -14.66%. It is interesting to note that both WBK and SP500 index significantly outperform during months when quarterly/annual results are announced.

Many of life's failures are people who did not realize how close they were to success when they gave up.
-- Thomas Edison

WBK 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 WBK's volatility from 21 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

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

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

Based on your interest in WBK you may find it interesting to know that TPNL, HEAR and AMRN have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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