Decision summary
Question: Large Corrections: When Should You Buy?
50%+ below high produced a 25.9% median 24-month return versus 25.2% for all eligible observations. The loss greater than 20% rate was 12.9% versus 13.7% baseline.
- Future return potential: 50%+ below high median 25.9% versus All eligible observations 25.2%; excess 0.7%.
- Correction/drawdown risk: loss greater than 20% 12.9% versus baseline 13.7%; excess -0.8%. Median max drawdown -9.9%.
- Entry timing risk: entry condition Favorable based on loss risk and forward drawdown.
- Use: buying/holding/trimming decisions require entry condition, thesis condition, and current position. No simple Buy/Sell label is inferred from price history alone.
Baseline comparison
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| 50%+ below high | 25.9% | -0.7% | 57.9% | -26.6% | 74.3% | 12.9% | 8.5% | 3.1% | -9.9% | 3,092 |
| All eligible observations | 25.2% | -2.0% | 55.1% | -27.5% | 73.5% | 13.7% | 9.0% | 3.4% | -10.4% | 4,650 |
| EW broad index | 28.3% | 13.9% | 51.5% | -0.9% | 85.9% | 3.6% | 3.1% | 0.0% | -9.6% | 4,641 |
| Signal excess vs baseline | 0.7% | -0.8% | -0.5% | -0.3% | 0.5% |
Distribution by bucket
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| 50%+ below high | 28.6% | 2.1% | 62.3% | -22.9% | 76.4% | 11.4% | 7.3% | 2.8% | -8.4% | 7,071 |
| 30-50% below high | 31.8% | -2.9% | 73.3% | -32.6% | 73.1% | 15.4% | 10.9% | 4.1% | -15.2% | 5,589 |
| 20-30% below high | 24.2% | -6.2% | 61.6% | -30.2% | 70.2% | 15.4% | 10.1% | 3.8% | -13.9% | 6,519 |
| 0-20% below high | 24.4% | -1.2% | 52.6% | -25.6% | 73.9% | 12.6% | 8.2% | 2.9% | -8.8% | 34,410 |
Current ticker mapping
| Ticker | Current signal | Historical median return | Loss >20% | Entry condition | Suggested action |
|---|---|---|---|---|---|
| ABT | -30.0% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| ADBE | -48.3% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| APH | -120.1% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| BAC | -53.3% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| BX | -37.0% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| CEG | -34.4% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| CHTR | -68.0% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| CMG | -42.8% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| COIN | -64.5% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| CPB | -30.1% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| CRM | -41.6% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| CVS | -30.6% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| DPZ | -37.4% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| DRI | -150.7% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| EL | -32.2% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| ENPH | -34.2% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| FOX | -31.9% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| GE | -63.5% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| GPS | -30.1% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| HOOD | -35.3% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| INTU | -66.6% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| ISRG | -31.7% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| JPM | -181.1% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| JWN | -43.5% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| KKR | -40.4% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| KO | -51.0% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| LEN | -33.4% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| LIN | -75.4% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| LULU | -52.5% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| META | -30.1% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| MOS | -38.7% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| MSFT | -30.8% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| NFLX | -44.9% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| NKE | -47.2% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| NOC | -34.6% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| NOW | -52.9% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| ON | -32.3% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| ORCL | -54.4% from 52w high | 25.9% | 12.9% | Extreme risk | Starter only after thesis and stabilization checks |
| PARA | -34.3% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
| PAYC | -45.4% from 52w high | 25.9% | 12.9% | Elevated risk | Starter only after thesis and stabilization checks |
Suggested actions
| Situation | Suggested action |
|---|---|
| No position | Do not open full size from the signal alone; wait for stabilization or use a starter only if thesis is Intact. |
| Partial position | Hold only if thesis is Intact; reserve cash because downside history is elevated. |
| Full position | Do not add from price history alone. |
| Overweight position | Consider rebalancing when entry condition is Elevated risk. |
| Thesis deteriorating | Reduce or avoid regardless of historical base rate. |
What this signal does not mean
This signal does not create a simple Buy/Sell label. It is a historical base-rate input for entry sizing, holding discipline, and thesis monitoring.
Dataset disclosure
Universe: local database stocks with adjusted monthly prices from 2001-01-31 to 2026-06-26. Historical S&P 500 snapshot membership exists, but the studies use the available local stock universe rather than fully reconstructed historical constituents. Filters: adjusted price at least $5, trailing 3-month average daily dollar volume at least $1 million, market cap at least $300 million when available. Survivorship-bias risk remains.
Methodology
Observations use monthly adjusted prices when available, 24-month forward returns, forward maximum drawdown from the observation price, and a 12-month cooldown to reduce overlapping signals. Baseline uses all eligible observations that pass the same price/data availability filters. EW broad-market index is used because SPY price history is not available in the local service.
Historical patterns do not guarantee future results.