BANK OF BARODA

118.0 -1.19 (-1.01%) Buy

BANKBARODA investors take a moment to reassess their portfolio allocation

13 min read

BANK OF BARODA underperformed on Friday. It delivered -1.01% to close at 118.0. On a day when the overall market breadth was 71%, it closed higher than 31% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing BANKBARODA]

Buy-and-Hold investors in BANKBARODA experienced a maximum drawdown of -9.19% over the last three months. It delivered +15.23% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

BANKBARODA has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 18 Nov, 2016 to 28 Sep, 2018. Over the last 3 years and 1 month, BANKBARODA underperformed the NIFTY-50 index on 53% days.

During the last three months BANKBARODA was mostly profitable and delivered on average +0.25% per day. It's best return during this period (of +8.35%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.46%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 4 profitable days, which started on 26 Oct, 2018 and went on till 31 Oct, 2018. This bullish trend returned +12.06% to investors.

The last 12 months saw BANKBARODA's investors making profits in 5 months and incurring losses in 7 months. During the last year, BANKBARODA and NIFTY-50 index had the same number of profitable months. BANKBARODA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -34.95% compared to -6.42% returned by NIFTY-50 index in Sep 2018. BANKBARODA and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both BANKBARODA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

There is nothing wrong with changing a plan when the situation has changed.
-- Seneca

BANKBARODA is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in BANKBARODA's volatility from 19 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 BANKBARODA has significant negative skewness in it's return distribution. This indicates that BANKBARODA is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in BANKBARODA derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in BANKBARODA you may find it interesting to know that IGARASHI, RESPONIND and LTI have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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