Question 1: Is the average return for United States Steel stock higher after a drop?
Consider two situations,
Case 1: United States Steel stock drops by -5% or more in a week
Case 2: United States Steel stock rises by 5% or more in a week
Is the average return for United States Steel stock higher over the subsequent month after Case 1 or Case 2?
X stock fares better after Case 2, with an average return of 0.2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 3.2% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how United States Steel stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold United States Steel stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you - at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine's calculations, patience absolutely pays for most stocks!
For X stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
Next N DaysX Average ReturnS&P 500 Average Return1 day-0.1%0.5%5 days-0.4%1.1%10 days-0.4%0.9%21 days0.2%3.1%63 days3.8%5.2%126 days10.2%7.4%252 days17.2%15.6%
You can try the engine to see what this table looks like for United States Steel after a larger loss over the last week, month, or quarter.
Question 3: What about the average return after a rise if you wait for a while?
The average return after a rise is understandably lower than a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks - although X stock appears to be an exception to this general observation.
X's returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
Next N DaysX Average ReturnS&P 500 Average Return1 day0.1%-0.3%5 days0.8%-0.3%10 days1.6%0.1%21 days3.2%0.5%63 days8.6%3.0%126 days10.7%6.6%252 days14.7%11.7%
It's pretty powerful to test the trend for yourself for United States Steel stock by changing the inputs in the charts above.