Cosan Shares Plunge 12.57% in Five Days Amid Market Volatility

Cosan(CSAN) shares fell 3.42% intraday, marking the fifth consecutive day of decline and reaching its lowest level since April 2025, with a 12.57% drop over the past five days.

The strategy of buying CSAN shares after they reached a recent low and selling after one week resulted in a significant loss. Over the past five years, the strategy yielded a return of -60.62%, vastly underperforming the benchmark return of -100.00%. Although the strategy outperformed the benchmark by 39.38%, it still delivered a negative return, indicating substantial losses for investors. The Sharpe ratio of -0.78 further highlights the strategy's poor risk-adjusted performance. Additionally, the maximum drawdown was 0.00%, which suggests that the strategy managed to avoid further losses during the backtest period, but this came at the cost of the significant initial decline.

Market volatility has been a significant factor affecting Cosan's stock performance. The broader S&P 500 index experienced fluctuations, reflecting investor unease which has likely impacted Cosan's share price.

Technical analysis indicates several negative signals for Cosan's stock. Both short and long-term moving averages are showing sell signals, and there is a lack of support from accumulated volume below the current price level. These technical indicators suggest potential continued weakness in the stock's performance.

Cosan's short interest ratio stands at 1.99 million shares, which could influence stock price movements. This high short interest could lead to short covering or increased selling pressure, further affecting the stock's trajectory.

The broader Brazilian market has also played a role in Cosan's stock decline. Shares in Cosan SA Industria e Comercio fell to 5-year lows amid broader declines in Brazilian stocks, as indicated by the Bovespa index's performance. This market-wide downturn has likely contributed to the bearish outlook for Cosan's stock.