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Machine Learning Engine Says S&P 500 Is 8 Times More Likely To Drop 5% In A Month Than To Rise 10%
Did you know if you’re investing in S&P 500, over the next month it’s roughly 8 times more likely you’ll lose 5% or more, than rack up gains greater than 10%?
Specifically, based on Trefis analysis of many decades of data:
Once again we see context insensitive data masquerading as something applicable to now.
Specifically, based on Trefis analysis of many decades of data:
There is overall about 8% chance that S&P 500 will drop by -5% or more, over 20 trading days (roughly a month) There is ONLY about 1% chance that S&P 500 will rise by 10% or more, over 20 trading days (roughly a month)
Does one really need machine learning to count the number of rolling 20 trading day periods where the market goes up 10% or drops by -5% (drops by a negative amount)? But I digress.
This generic observation applies just as much to June 2009 as to July 2019. But the contexts are very different. This result does not apply specifically to now, despite the text of the article saying that "over the next month, the S&P is roughly 8x more likely" to lose 10% than rise 5%."
Look carefully at the numbers - of course the market is much more likely to move 5% (in either direction even given an upward bias) over a month than it is likely it is to move 10%. What is this headline telling you that you don't already know?
Comments
This generic observation applies just as much to June 2009 as to July 2019. But the contexts are very different. This result does not apply specifically to now, despite the text of the article saying that "over the next month, the S&P is roughly 8x more likely" to lose 10% than rise 5%."
Look carefully at the numbers - of course the market is much more likely to move 5% (in either direction even given an upward bias) over a month than it is likely it is to move 10%. What is this headline telling you that you don't already know?