Insurance THEME

1155.36 +3.15 (+0.27%) Sell

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Stop-loss on the minds of INSURANCE THEME investors as it destroyed investor wealth

14 min read

Insurance was among the worst performers today. It gained +0.27% to close at 1155.36. During the last week it lost -1.5% and saw a maximum drawdown of -1.89% before bouncing back.

[Theme constituents]

Buy-and-Hold investors in ~INSURANCE experienced a maximum drawdown of -15.39% over the last three months. It lost -14.29% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +8.79%.


~INSURANCE has been underperforming the SP500 index in recent time, after having outperformed till 1 Aug, 2017. Over the last 2 years 11 months and 14 days, ~INSURANCE underperformed the SP500 index on 50% days. Which indicates that on days ~INSURANCE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

~INSURANCE was profitable on 50% days in the last three months. During this time, it delivered on average -0.24% per day. It delivered it's worst daily return of -3.53%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 28 Sep, 2018. The trend delivered -2.79% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +8.5% to investors.

~INSURANCE had 5 profitable and 7 loss making months over the last year. During the last year, ~INSURANCE underperformed SP500 index on monthly return basis. ~INSURANCE was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.95% compared to -7.75% returned by SP500 index in Dec 2018. ~INSURANCE and SP500 index, both had periods of 2 consecutive losing months. It is interesting to note that both ~INSURANCE and SP500 index significantly outperform during months when quarterly/annual results are announced.

A stock broker is one who invests other people's money until its all gone.
-- Woody Allen

~INSURANCE is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in ~INSURANCE's volatility from 19 Sep, 2018 to 4 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 ~INSURANCE has significant positive skewness in it's return distribution. This indicates that investors can expect ~INSURANCE to recover from drawdowns quickly. Which makes ~INSURANCE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~INSURANCE), TYHT has performed really well and deserves to be closely tracked for investment opportunities.

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