ALKEM LABORATORIES LTD. showed marginal outperformance on Friday. It increased by +0.38% to close at 1897.25. On a day when the overall market breadth was 71%, it closed higher than 48% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
ALKEM showed a bearish trend over the last 3 months. During this period ALKEM fell by -2.85% and saw a maximum drawdown of -5.95%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ALKEM till volatility reduces and a clear trend emerges.
ALKEM has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 17 May, 2016 to 27 Mar, 2017. Over the last 3 years and 1 month, ALKEM underperformed the NIFTY-50 index on 50% days. Which indicates that on days ALKEM underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.
During the last three months ALKEM was mostly loss making and delivered on average -0.04% per day. It's best return during this period (of +2.59%) was on Monday, 12 Nov, 2018. While it's worst loss in the same period (of -1.77%) was on Wednesday, 16 Jan, 2019. The longest stort-term trend during this period was 6 losing days, which started on 21 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -2.83% of investor capital.
During the last year ALKEM had 6 profitable months and 6 loss making months. ALKEM returned profits in more months than NIFTY-50 index. ALKEM significantly outperformed NIFTY-50 index in Jul 2018, when it returned +14.83% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ALKEM and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ALKEM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
An investment in knowledge pays the best interest.
-- Benjamin Franklin
ALKEM is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ALKEM's volatility from 19 Oct, 2018 to 11 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 ALKEM has significant negative skewness in it's return distribution. This indicates that ALKEM is very risky for short-term investment and can significantly underperform for long durations.
ALKEM has more chance of extreme outcomes than the NIFTY-50 index. Therefore, ALKEM must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than ALKEM.
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