ALPHAGEO is a falling knife, continues to bleed every investor trying to catch it

ALPHAGEO (INDIA) LIMITED significantly underperformed on Wednesday. It fell by -1.9% to close at 452.9. On a day when the overall market breadth was 70%, it closed higher than 74% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.

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ALPHAGEO is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for ALPHAGEO's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -3.6%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to ALPHAGEO.

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Monthly Performance

Alpha (outperformance)

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Return distribution

ALPHAGEO has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 7 Oct, 2016 to 23 Jan, 2019. One must note that ALPHAGEO is currently at it's worst performance to the NIFTY-50 index which makes it a bad investment candidate. Over the last 3 years and 1 month, ALPHAGEO underperformed the NIFTY-50 index on 55% days.

During the last three months ALPHAGEO was mostly loss making and delivered on average -0.04% per day. It's best return during this period (of +4.43%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -6.23%) was on Monday, 10 Dec, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +5.32%) started on 10 Jan, 2019 and went on till 17 Jan, 2019 while the bearish trend (which returned -4.84%) started on 2 Jan, 2019 and went on till 9 Jan, 2019.

During the last year ALPHAGEO had 3 profitable months and 9 loss making months. ALPHAGEO returned profits in fewer months than NIFTY-50 index. ALPHAGEO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -20.41% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ALPHAGEO had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Aug 2018 to Nov 2018) during which period it delivered -35.59%. It is interesting to note that both ALPHAGEO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Never spend your money before you have earned it.
-- Thomas Jefferson

ALPHAGEO 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 ALPHAGEO's volatility from 25 Oct, 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 ALPHAGEO has significant negative skewness in it's return distribution. This indicates that ALPHAGEO is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ALPHAGEO you may find it interesting to know that NIFTY-GS-15YRPLUS, BAJFINANCE and BRITANNIA have all shown remarkable performance and qualify to be on every investor's watchlist.