Want to invest in ENERGYSMALLCAPS THEME? Avoid as it was among the worst performers

Energy Small Caps was among the worst performers on Tuesday. It returned -2.6% to close at 790.12 which is it's 52 week low, down -28% from it's 52 week high.

[Theme constituents]

~ENERGYSMALLCAPS showed a strong down trend over the last 3 months. During this period ~ENERGYSMALLCAPS returned -24.35% and saw a maximum drawdown of -27.55%. There were 2 short signals during this period that returned a cumulative of +20.07% to investors.

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Monthly Performance

Alpha (outperformance)

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Return distribution

~ENERGYSMALLCAPS has been underperforming the SP500 index in recent time, after having outperformed till 7 Jun, 2016. ~ENERGYSMALLCAPS is currently at it's worst performance to the SP500 index and therefore does not make a good investment candidate. Over the last 2 years 11 months and 14 days, ~ENERGYSMALLCAPS underperformed the SP500 index on 52% days.

During the last three months ~ENERGYSMALLCAPS was mostly loss making and delivered on average -0.43% per day. It's best return during this period (of +2.99%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -4.43%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +1.63% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -10.64% of investor capital.

On monthly basis, ~ENERGYSMALLCAPS delivered losses in more months over the last year, than profits. ~ENERGYSMALLCAPS delivered profits less regularly than SP500 index. ~ENERGYSMALLCAPS was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -12.38% compared to -7.75% returned by SP500 index in Dec 2018. ~ENERGYSMALLCAPS had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both ~ENERGYSMALLCAPS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth is not his that has it, but his that enjoys it.
-- Benjamin Franklin

~ENERGYSMALLCAPS 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 ~ENERGYSMALLCAPS's volatility from 19 Sep, 2018 to 6 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 ~ENERGYSMALLCAPS has positive skewness in it's return distribution. This indicates that investors can expect ~ENERGYSMALLCAPS to make attempts to recover from drawdowns quickly. Which makes ~ENERGYSMALLCAPS a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in ~ENERGYSMALLCAPS), three instruments that deserve special mention are PRQR, HEAR and I. They have all outperformed the market and must be closely watched for investment opportunities.