212.65 -2.57 (-1.21%) Sell

Search for alternative investments is on for AMBUJACEM investors as it underperforms

13 min read

AMBUJA CEMENTS LTD delivered lacklustre performance today. It returned -1.21% to close at 212.65. During the last week it returned -1.02% and saw a maximum drawdown of -1.94% before bouncing back.

[Themes containing AMBUJACEM]

Buy-and-Hold investors in AMBUJACEM experienced a maximum drawdown of -8.96% over the last three months. It gained +1.65% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


AMBUJACEM has been underperforming the NIFTY-50 index in recent time, after having outperformed till 19 Aug, 2016. Over the last 3 years and 1 month, AMBUJACEM underperformed the NIFTY-50 index on 52% days.

AMBUJACEM was profitable on 50% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's best daily return of +4.0%, during this period, on Tuesday, 11 Dec, 2018. There was initially a bearish trend during this period which started on 22 Oct, 2018 and went on till 26 Oct, 2018. The trend delivered -9.29% losses to investors. This was followed by a bullish trend that started on 31 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +6.6% to investors.

On monthly basis, AMBUJACEM delivered profits and losses in equal number of months. AMBUJACEM delivered profits in more months than NIFTY-50 index. AMBUJACEM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -18.05% compared to -6.42% returned by NIFTY-50 index in Sep 2018. AMBUJACEM had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered +21.03%. It is interesting to note that both AMBUJACEM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The studios don't finance anymore, they get outside funds.
-- Robert Rodriguez

AMBUJACEM 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 AMBUJACEM's volatility from 24 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 AMBUJACEM has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

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

On a general note (since you are interested in AMBUJACEM), two small cap instruments that deserve special mention are NIITTECH and VINATIORGA. They have significantly outperformed the overall market.

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