Are you evaluating investing in ALICON? Wait as it delivered lacklustre performance

ALICON CASTALLOY LIMITED delivered lacklustre performance today. It lost -0.42% to close at 567.85. It's recent 5 day performance has been -0.88%, -0.75%, -0.28%, -0.83% and +0.69%.

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ALICON showed a down trend over the last 3 months. During this period ALICON lost -3.75% and saw a maximum drawdown of -16.03%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ALICON till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

ALICON has been underperforming the NIFTY-50 index in recent time, after having outperformed till 9 Jan, 2018. Over the last 3 years and 1 month, ALICON outperformed the NIFTY-50 index on 46% days. Which indicates that on days ALICON outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

ALICON returned losses on 55% days in the last three months. During this time, it delivered on average -0.04% per day. It delivered it's worst daily return of -7.35%, during this period, on Wednesday, 26 Dec, 2018. There was initially a bearish trend during this period which started on 12 Nov, 2018 and went on till 19 Nov, 2018. The trend delivered -3.83% losses to investors. This was followed by a bullish trend that started on 20 Nov, 2018 and ended on 26 Nov, 2018. This bullish trend delivered +8.3% to investors.

ALICON had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of ALICON and NIFTY-50 index were the same. ALICON was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Dec 2018, returned -12.07% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ALICON 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 +9.0%. It is interesting to note that both ALICON and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-- Warren Buffett

ALICON 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 ALICON's volatility from 22 Oct, 2018 to 18 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 ALICON has significant negative skewness in it's return distribution. This indicates that ALICON is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in ALICON), two instruments that deserve special mention are SPLIL and MERCK. They have significantly outperformed the overall market this year.