90.1 +0.39 (+0.43%) Sell

Don't give up on YUM now, it gave a fairly good return

13 min read

YUM BRANDS INC is looking better than most other alternatives on Tuesday. It grew by +0.43% to close at 90.1. It is currently trading +18% above it's 52 week low of 76.3 and is down only -3% from it's 52 week high.

[Themes containing YUM]

YUM showed a up trend over the last 3 months. During this period YUM grew by +1.75% and saw a maximum drawdown of -6.45%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in YUM till volatility reduces and a clear trend emerges.


YUM has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, YUM underperformed the SP500 index on 46% days. Which indicates that on days YUM underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months YUM delivered losses on 51% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.6%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -2.68%) was on Thursday, 1 Nov, 2018. There was initially a bearish trend during this period which started on 18 Oct, 2018 and went on till 29 Oct, 2018. The trend delivered -6.62% losses to investors. This was followed by a bullish trend that started on 23 Nov, 2018 and ended on 30 Nov, 2018. This bullish trend delivered +5.83% to investors.

On monthly basis, YUM delivered profits in more months over the last year, than losses. YUM delivered profits less regularly than SP500 index. YUM significantly outperformed SP500 index in Aug 2018, when it returned +9.59% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. YUM 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 YUM and SP500 index significantly outperform during months when quarterly/annual results are announced.

I made my money the old-fashioned way. I was very nice to a wealthy relative right before he died.
-- Malcolm Forbes

YUM is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in YUM's volatility from 20 Sep, 2018 to 2 Nov, 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 YUM has significant positive skewness in it's return distribution. This indicates that investors can expect YUM to recover from drawdowns quickly. Which makes YUM a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

On a general note (since you are interested in YUM), three mid cap instruments that deserve special mention are LULU, ABMD and EW. They have all outperformed the market and must be closely watched for investment opportunities.

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