38.78 -1.15 (-2.95%) Sell

WDC investors incur serious losses

13 min read

WESTERN DIGITAL CORP is a falling knife that can bleed you if you catch it on Friday. It delivered -2.95% to close at 38.78 which is it's 52 week low, down -63% from it's 52 week high.

[Themes containing WDC]

Buy-and-Hold investors in WDC experienced a maximum drawdown of -36.13% over the last three months. It delivered -32.18% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +32.18% for investors.


WDC has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 16 Mar, 2018 to 13 Dec, 2018. Over the last 2 years 11 months and 10 days, WDC underperformed the SP500 index on 49% days. Which indicates that on days WDC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

WDC returned losses on 56% days in the last three months. During this time, it delivered on average -0.55% per day. It delivered it's worst daily return of -18.18%, during this period, on Friday, 26 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 -7.45% of investor capital.

The last 12 months saw WDC's investors making profits in 4 months and incurring losses in 8 months. WDC was less consistent in delivering monthly returs than SP500 index. WDC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -25.77% compared to -7.28% returned by SP500 index in Oct 2018. WDC had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jun 2018 to Oct 2018) during which period it delivered -60.46%.

Financial security and independence are like a three-legged stool resting on savings, insurance and investments.
-- Brian Tracy

WDC 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 WDC's volatility from 27 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

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

Investors trading in WDC derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in WDC you may find it interesting to know that ABMD and SQ are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter