1276.1 -10.51 (-0.82%) Sell

ABB continues its fall as more investors loose confidence

13 min read

ABB underperformed today. On a longer term basis, investors in ABB INDIA LIMITED made +0.04% per day. Friday's performance of -0.82% was a significant underperformance compared to it's daily average.

[Themes containing ABB]

Buy-and-Hold investors in ABB experienced a maximum drawdown of -11.3% over the last three months. It returned +0.35% during this flat trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.


ABB has been underperforming the NIFTY-50 index in recent time, after having outperformed till 11 Apr, 2016. Over the last 3 years and 1 month, ABB underperformed the NIFTY-50 index on 53% days.

During the last three months ABB delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.87%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.69%) was on Tuesday, 18 Dec, 2018. There was initially a bullish trend during this period which started on 6 Dec, 2018 and went on till 13 Dec, 2018. The bullish trend returned +4.72% to investors. This was followed by a bearish trend that started on 14 Jan, 2019 and ended on 18 Jan, 2019. This bearish trend lost -5.24% of investor capital.

On monthly basis, ABB delivered losses in more months over the last year, than profits. ABB delivered profits less regularly than NIFTY-50 index. ABB was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -15.52% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ABB had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jul 2018 to Sep 2018) during which period it delivered +18.26%. It is interesting to note that both ABB and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-- Norman Vincent Peale

ABB is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in ABB's volatility from 2 Nov, 2018 to 10 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ABB has significant negative skewness in it's return distribution. This indicates that ABB is very risky for short-term investment and can significantly underperform for long durations.

NIFTY-50 index has more chance of extreme outcomes than ABB. Therefore, NIFTY-50 must receive a lower allocation than ABB in your portfolio. NIFTY-50 index usually has shorter drawdown period than ABB.

On a general note (since you are interested in ABB), CUB is a mid cap that deserves to be closely tracked for investment opportunities.

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