54.57 +0.35 (+0.65%) Sell

Don't go profit booking on WPP now, it delivered a decent return

13 min read

WPP outperformed today. On a longer term basis, investors in WPP PLC (Foreign) made -0.01% per day. Monday's performance of +0.65% was a outperformance compared to it's daily average.

[Themes containing WPP]

WPP showed a strong bearish trend over the last 3 months. During this period WPP delivered -26.8% and saw a maximum drawdown of -32.26%. There were 2 short signals during this period that returned a cumulative of +25.34% to investors.


WPP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 19 Apr, 2016 to 8 Nov, 2018. Over the last 2 years 11 months and 10 days, WPP underperformed the SP500 index on 49% days. Which indicates that on days WPP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

WPP returned losses on 59% days in the last three months. During this time, it delivered on average -0.45% per day. It delivered it's worst daily return of -17.3%, during this period, on Thursday, 25 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +4.04%) started on 19 Oct, 2018 and went on till 24 Oct, 2018 while the bearish trend (which returned -4.61%) started on 15 Nov, 2018 and went on till 20 Nov, 2018.

The last 12 months saw WPP's investors making profits in 4 months and incurring losses in 8 months. WPP was less consistent in delivering monthly returs than SP500 index. WPP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -24.02% compared to -7.28% returned by SP500 index in Oct 2018. WPP had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -39.45%. It is interesting to note that both WPP and SP500 index significantly outperform during months when quarterly/annual results are announced.

It takes as much energy to wish as it does to plan.
-- Eleanor Roosevelt

WPP 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 WPP's volatility from 18 Sep, 2018 to 25 Oct, 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 WPP has significant positive skewness in it's return distribution. This indicates that investors can expect WPP to recover from drawdowns quickly. Which makes WPP a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in WPP), two mid cap instruments that deserve special mention are RHT and LULU. They have significantly outperformed the overall market.

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