How long does it take a stock to get back to even after a large daily move down? And does the magnitude impact how long it takes the position to recover the loss?
We’ve all been in losing trades and wondered if we should hang on to the position for a little longer or cut it loose. So, to help answer the question, we studied the short-term performance of stocks and ETFs after different daily loss totals.
The study analyzed 324 assets over a 20-year period. We calculated the 5-day returns following single-day losses up to 5%.
See the full research report here.
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