ACC LIMITED delivered lacklustre performance today. It returned -1.06% to close at 1439.75. It's recent 5 day performance has been -1.28%, -0.64%, +1.63%, +0.07% and +0.75%.
ACC showed a up trend over the last 3 months. During this period ACC grew by +1.08% and saw a maximum drawdown of -6.92%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ACC till volatility reduces and a clear trend emerges.
During the last three months ACC was mostly profitable and delivered on average +0.03% per day. It's best return during this period (of +3.65%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -3.22%) was on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 31 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +9.3% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 6 Dec, 2018. This bearish trend lost -6.25% of investor capital.
On monthly basis, ACC delivered losses in more months over the last year, than profits. ACC delivered profits less regularly than NIFTY-50 index. ACC significantly outperformed NIFTY-50 index in Jul 2018, when it returned +15.88% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ACC and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ACC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
ACC 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 ACC's volatility from 19 Oct, 2018 to 14 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 ACC has significant negative skewness in it's return distribution. This indicates that ACC is very risky for short-term investment and can significantly underperform for long durations.
Investors trading in ACC derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than ACC. Therefore, NIFTY-50 must receive a lower allocation than ACC in your portfolio. NIFTY-50 index usually has shorter drawdown period than ACC.
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