Shares of Walt Disney (NYSE: DIS) has risen an impressive 54% in the last six months (126 trading days) and is currently trading at $ 190 per share. DIS’s recent stock set was driven by the strong performance of its streaming business, Disney +, as demand for streaming was high during the pandemic. Disney + boasts a total global subscriber of 95 million in just a year and a half since launch. To put things in perspective, Netflix has reached 200 million subscribers after a decade of operation; at the current rate Disney is likely to reach a turning point in a much shorter time. In addition to strong demand for streaming, with the phasing out of locks and the successful introduction of vaccines, market expectations are high for Disney’s traditional businesses, such as cable and theme parks. This has led to great investor interest in DIS shares, which has led to an impressive rise in its price. But will Disney shares continue for the coming week or is a stock correction more likely?
According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price data over the past ten years, yields on DIS stocks on average close to 5% in the following quarterly (63 trading days) period after an increase of 54% compared to the previous six-month period (126 trading days). But it is especially likely that the shares will have bad The S & P500 over the next three months, with an expected return that would be 1.5% lower than the S & P500.
But how would these numbers change if you were interested in holding DIS stocks for a shorter or longer period of time? You can test the answer and many other combinations on Trefis Machine learning to test DIS’s chances of growth after a fall and vice versa. You can test your chance of recovery at different time intervals of a quarter, a month or even just one day!
ENGINE MOTOR FOR LEARNING – try it yourself:
IF DIS shares moved -5% over five trading days, THEN over the next 21 trading days, DIS shares moved an average of 2 percent, implying a return that is almost in line with that on the S & P500.
More importantly, there is a 58% probability for a positive return in the next 21 trading days and 37% probability for a positive excess return after a change of -5% over five trading days.
A few fun scenarios, frequently asked questions and designing the movement of DIS stocks:
Question 1: Is the average return of Walt Disney
Consider two situations,
Case 1: Walt Disney shares fall -5% or more in the week
Case 2: Walt Disney shares increase 5% or more in a week
Is the average return on Walt Disney shares higher over the next month after Case 1 or Case 2?
DIS stocks prices are better after case 2, with an average return of 2% over the next month (21 trading days) in case 1 (where the stock had just suffered a 5% loss in the previous week), versus average yield 2.6% for case 2.
For comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days in case 1, and an average return of only 0.5% for case 2 as detailed on our dashboard which describes in detail average yield for the S&P 500 after a fall or rise.
Try the Trefis machine learning machine above to see for yourself how Walt Disney shares will behave after any particular gain or loss over a period of time.
Question 2: Is patience worth it?
If you buy and hold Walt Disney shares, expectations will drop over time, short-term fluctuations will reverse, and the long-term positive trend will favor you – at least if the company is otherwise strong.
All in all, according to the data and calculations of the Trefis machine learning engine, patience absolutely pays off most stocks!
For DIS stocks, refund in the next N days after a change of -5% in the last five days of trading is shown in detail in the table below, along with the yields for the S & P500:
Question 3: What about the average return after an increase if you wait a while?
The average yield after the rise is generally lower than after the fall as explained in detail in the previous question. Interestingly, if the stock has risen in the last few days, it would be better to avoid short-term bets on most stocks.
DISs return in the next N days after a change of 5% in the last five days of trading is shown in detail in the table below, along with the yields for the S & P500:
It’s pretty powerful to test the Walt Disney stock trend on your own by changing the entries on the charts above.
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