72.0 -1.98 (-2.76%) Sell

Don't even consider investing in XOM now, it is a risky investment

13 min read

XOM ranked among the worst performers today. On a longer term basis, investors in EXXON MOBIL CORP made 0.0% per day. Tuesday's performance of -2.76% was a underperformance compared to it's daily average.

[Themes containing XOM]

XOM showed a strong bearish trend over the last 3 months. During this period XOM delivered -14.92% and saw a maximum drawdown of -16.86%. There was a short signal during this period which returned +11.76%.


XOM has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 6 Jul, 2016 to 9 Mar, 2018. Over the last 2 years 11 months and 14 days, XOM underperformed the SP500 index on 51% days.

During the last three months XOM was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +2.25%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -3.45%) was on Thursday, 11 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 26 Nov, 2018 and went on till 3 Dec, 2018. This bullish trend returned +7.38% to investors.

The last 12 months saw XOM's investors making profits in 5 months and incurring losses in 7 months. XOM was less consistent in delivering monthly returs than SP500 index. XOM was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -13.24% compared to -7.75% returned by SP500 index in Dec 2018. XOM had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both XOM and SP500 index significantly outperform during months when quarterly/annual results are announced.

I would not pre-pay. I would invest instead and let the investments cover it.
-- Dave Ramsey

XOM 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 XOM's volatility from 5 Oct, 2018 to 12 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that XOM has positive skewness in it's return distribution. This indicates that investors can expect XOM to make attempts to recover from drawdowns quickly. Which makes XOM a good candidate for momentum based trading on short-term bullish trends or counter-trends.

Investors trading in XOM derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

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

Based on your interest in XOM you may find it interesting to know that GNK and OPNT are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).

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