Environmental Control THEME

1040.13 -12.05 (-1.16%) Sell

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

14 min read

Environmental Control was among the worst performers on Tuesday. It fell by -1.16% to close at 1040.13. On a day when the overall market breadth was 34%, it closed higher than 69% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~ENVCONTROL showed a strong bearish trend over the last 3 months. During this period ~ENVCONTROL fell by -14.04% and saw a maximum drawdown of -14.3%. There was a short signal during this period which returned +12.21%.


~ENVCONTROL has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 29 Jan, 2018 to 7 Sep, 2018. Over the last 1 year and 2 months, ~ENVCONTROL outperformed the SP500 index on 53% days.

During the last three months ~ENVCONTROL was mostly loss making and delivered on average -0.23% per day. It's best return during this period (of +2.49%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -2.59%) was on Monday, 17 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -4.51% of investor capital.

During the last year ~ENVCONTROL had 8 profitable months and 4 loss making months. Profitable number of months of ~ENVCONTROL and SP500 index were the same. ~ENVCONTROL was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.99% compared to -7.75% returned by SP500 index in Dec 2018. ~ENVCONTROL and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both ~ENVCONTROL and SP500 index significantly outperform during months when quarterly/annual results are announced.

There's more honor in investment management than in investment banking.
-- Charlie Munger

~ENVCONTROL 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 ~ENVCONTROL's volatility from 9 Oct, 2018 to 4 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 ~ENVCONTROL has significant positive skewness in it's return distribution. This indicates that investors can expect ~ENVCONTROL to recover from drawdowns quickly. Which makes ~ENVCONTROL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~ENVCONTROL you may find it interesting to know that V, CSCO and PFE are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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