REALESTATE THEME is a falling knife, continues to bleed every investor trying to catch it

Real Estate is a falling knife that can bleed you if you catch it on Tuesday. It surged by +0.51% to close at 721.703. On a day when the overall market breadth was 34%, it closed higher than 3% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~REALESTATE showed a strong bearish trend over the last 3 months. During this period ~REALESTATE fell by -18.13% and saw a maximum drawdown of -19.5%. There was a short signal during this period which returned +18.13%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~REALESTATE has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 2 Apr, 2018 to 9 Oct, 2018. Over the last 11 months and 14 days, ~REALESTATE underperformed the SP500 index on 57% days.

~REALESTATE returned losses on 67% days in the last three months. During this time, it delivered on average -0.31% per day. It delivered it's worst daily return of -3.77%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 8 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -5.43% of investor capital.

During the last year ~REALESTATE had 3 profitable months and 9 loss making months. ~REALESTATE returned profits in fewer months than SP500 index. ~REALESTATE was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -9.3% compared to -7.75% returned by SP500 index in Dec 2018. ~REALESTATE had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -26.46%. It is interesting to note that both ~REALESTATE and SP500 index significantly outperform during months when quarterly/annual results are announced.

If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.
-- Edmund Burke

~REALESTATE 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 ~REALESTATE's volatility from 3 Oct, 2018 to 7 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 ~REALESTATE has positive skewness in it's return distribution. This indicates that investors can expect ~REALESTATE to make attempts to recover from drawdowns quickly. Which makes ~REALESTATE a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

Based on your interest in ~REALESTATE you may find it interesting to know that EW, RHT and ABMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.