WWE investors check their stop-losses as it underperforms
14 Dec, 201813 min read
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WORLD WRESTLING ENTERTAINMENTINC has destroyed investor wealth on Friday. It returned -1.38% to close at 72.66. It is currently trading +145% above it's 52 week low of 29.55 and is down only -24% from it's 52 week high.
Buy-and-Hold investors in WWE experienced a maximum drawdown of -36.22% over the last three months. It returned -17.2% during this strong 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. The net profit from Short signals was +13.06%.
WWE has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, WWE outperformed the SP500 index on 52% days.
WWE returned losses on 59% days in the last three months. During this time, it delivered on average -0.25% per day. It delivered it's best daily return of +8.78%, during this period, on Wednesday, 28 Nov, 2018. There was initially a bullish trend during this period which started on 20 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +9.53% to investors. This was followed by a bearish trend that started on 15 Oct, 2018 and ended on 19 Oct, 2018. This bearish trend lost -4.18% of investor capital.
On monthly basis, WWE delivered profits in more months over the last year, than losses. WWE delivered profits in more months than SP500 index. WWE significantly outperformed SP500 index in May 2018, when it returned +45.49% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WWE and SP500 index, both had periods of 6 consecutive profitable months.
You must gain control over your money or the lack of it will forever control you.
-- Dave Ramsey
WWE is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WWE's volatility from 28 Sep, 2018 to 29 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 WWE has significant positive skewness in it's return distribution. This indicates that investors can expect WWE to recover from drawdowns quickly. Which makes WWE 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 WWE. Therefore, SP500 must receive a lower allocation than WWE in your portfolio. WWE usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in WWE), if you are an investor in VIPS, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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