Housing Recovery THEME

1408.76 +24.5 (+1.74%) Sell

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

14 min read

Housing Recovery was among the worst performers on Tuesday. It grew by +1.74% to close at 1408.76. It is currently trading -27% below it's 52 week high of 1934.71.

[Theme constituents]

~HOUSINGRECOVERY showed a strong down trend over the last 3 months. During this period ~HOUSINGRECOVERY returned -20.47% and saw a maximum drawdown of -21.83%. There were 2 short signals during this period that returned a cumulative of +15.58% to investors.

Trend

~HOUSINGRECOVERY has been underperforming the SP500 index in recent time, after having outperformed till 23 Jan, 2018. Over the last 2 years 11 months and 14 days, ~HOUSINGRECOVERY outperformed the SP500 index on 54% days.

During the last three months ~HOUSINGRECOVERY was mostly loss making and delivered on average -0.35% per day. It's best return during this period (of +3.89%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -5.53%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 20 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -3.05% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +8.57% to investors.

On monthly basis, ~HOUSINGRECOVERY delivered profits and losses in equal number of months. ~HOUSINGRECOVERY delivered profits less regularly than SP500 index. ~HOUSINGRECOVERY was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.75% compared to -7.75% returned by SP500 index in Dec 2018. ~HOUSINGRECOVERY had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

Formal education will make you a living; self-education will make you a fortune.
-- Jim Rohn

~HOUSINGRECOVERY 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 ~HOUSINGRECOVERY's volatility from 25 Sep, 2018 to 30 Oct, 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 ~HOUSINGRECOVERY has significant positive skewness in it's return distribution. This indicates that investors can expect ~HOUSINGRECOVERY to recover from drawdowns quickly. Which makes ~HOUSINGRECOVERY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~HOUSINGRECOVERY), two instruments that have been extremely volatile in recent times are IMTE and NVCN. Investors in these instruments should consider reducing their exposure (to IMTE and NVCN) and diversifying their portfolios.

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