64.63 -2.29 (-3.54%) Sell

Prayers for WLK investors as it significantly underperforms

13 min read

WESTLAKE CHEMICAL CORP was among the worst performers on Friday. It delivered -3.54% to close at 64.63 which is it's 52 week low, down -47% from it's 52 week high.

[Themes containing WLK]

Buy-and-Hold investors in WLK experienced a maximum drawdown of -25.23% over the last three months. It delivered -24.66% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +24.66% for investors.


WLK has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 6 Jul, 2016 to 21 May, 2018. Over the last 2 years 11 months and 10 days, WLK underperformed the SP500 index on 50% days. Which indicates that on days WLK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

WLK returned losses on 58% days in the last three months. During this time, it delivered on average -0.43% per day. It delivered it's best daily return of +6.12%, during this period, on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -14.53% of investor capital.

The last 12 months saw WLK's investors making profits in 4 months and incurring losses in 8 months. WLK was less consistent in delivering monthly returs than SP500 index. WLK was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.74% compared to -7.28% returned by SP500 index in Oct 2018. WLK 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 -46.53%. It is interesting to note that both WLK and SP500 index significantly outperform during months when quarterly/annual results are announced.

Many folks think they aren't good at earning money, when what they don't know is how to use it.
-- Frank A. Clark

WLK is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in WLK's volatility from 17 Sep, 2018 to 11 Dec, 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 WLK has significant positive skewness in it's return distribution. This indicates that investors can expect WLK to recover from drawdowns quickly. Which makes WLK a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in WLK you may find it interesting to know that NSPR, APRN and SBOT have all shown remarkable performance and qualify to be on every investor's watchlist.

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