782.05 -3.14 (-0.4%) Buy

Want to invest in AMARAJABAT? Wait as it delivered lacklustre performance

13 min read

AMARA RAJA BATTERIES LTD. delivered lacklustre performance today. It returned -0.4% to close at 782.05. It's recent 5 day performance has been +2.36%, +0.22%, +0.37%, +0.94% and +0.05%.

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AMARAJABAT showed a up trend over the last 3 months. During this period AMARAJABAT returned +6.93% and saw a maximum drawdown of -11.58%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in AMARAJABAT till volatility reduces and a clear trend emerges.


AMARAJABAT has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, AMARAJABAT underperformed the NIFTY-50 index on 51% days.

During the last three months AMARAJABAT delivered losses on 51% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.96%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -2.69%) was on Monday, 5 Nov, 2018. There was initially a bearish trend during this period which started on 26 Oct, 2018 and went on till 31 Oct, 2018. The trend delivered -3.61% losses to investors. This was followed by a bullish trend that started on 4 Jan, 2019 and ended on 17 Jan, 2019. This bullish trend delivered +9.3% to investors.

On monthly basis, AMARAJABAT delivered profits and losses in equal number of months. AMARAJABAT delivered profits in more months than NIFTY-50 index. AMARAJABAT was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -12.55% compared to -6.42% returned by NIFTY-50 index in Sep 2018. AMARAJABAT had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -17.13%. It is interesting to note that both AMARAJABAT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.
-- Benjamin Franklin

AMARAJABAT 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 AMARAJABAT's volatility from 25 Oct, 2018 to 2 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 AMARAJABAT has significant negative skewness in it's return distribution. This indicates that AMARAJABAT is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in AMARAJABAT derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in AMARAJABAT), LTI is a mid cap that deserves to be closely tracked for investment opportunities.

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