ABFRL continues it's uptrend, although on a weaker note
18 Jan, 201915 min read
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ADITYA BIRLA FASHION & RT performed better than the broader market today. It returned +0.49% to close at 203.25. During the last week it lost -5.55% and saw a maximum drawdown of -6.51% before bouncing back.
Buy-and-Hold investors in ABFRL experienced a maximum drawdown of -6.51% over the last three months. It returned +11.74% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.
ABFRL has been underperforming the NIFTY-50 index in recent time, after having outperformed till 4 Jan, 2016. Over the last 3 years and 1 month, ABFRL underperformed the NIFTY-50 index on 52% days.
During the last three months ABFRL delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +8.96%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -4.05%) was on Wednesday, 16 Jan, 2019. There was initially a bearish trend during this period which started on 22 Nov, 2018 and went on till 30 Nov, 2018. The trend delivered -6.32% losses to investors. This was followed by a bullish trend that started on 3 Jan, 2019 and ended on 10 Jan, 2019. This bullish trend delivered +8.19% to investors.
ABFRL had 6 profitable and 6 loss making months over the last year. ABFRL was profitable in more months than NIFTY-50 index. ABFRL significantly outperformed NIFTY-50 index in Aug 2018, when it returned +41.63% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ABFRL had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered +12.75%. It is interesting to note that both ABFRL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Money is a terrible master but an excellent servant.
-- P.T. Barnum
ABFRL is becoming more 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 ABFRL's volatility from 5 Nov, 2018 to 7 Dec, 2018. 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 ABFRL has significant negative skewness in it's return distribution. This indicates that ABFRL is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than ABFRL. Therefore, NIFTY-50 must receive a lower allocation than ABFRL in your portfolio. NIFTY-50 index usually has shorter drawdown period than ABFRL.
On a general note (since you are interested in ABFRL), if you are evaluating ABFRL as an investment candidate, then you should read about SHILPAMED which has delivered similar performance and can help diversify your portfolio.
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