BOMBAY BURMAH TRADING COR managed to outperform the broader market on Friday. It surged by +0.07% to close at 1252.2. On a day when the overall market breadth was 71%, it closed higher than 92% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
Buy-and-Hold investors in BBTC experienced a maximum drawdown of -13.02% over the last three months. It surged by +2.68% during this 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.
BBTC has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 26 May, 2016 to 27 Aug, 2018. Over the last 3 years and 1 month, BBTC outperformed the NIFTY-50 index on 47% days. Which indicates that on days BBTC outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
BBTC returned losses on 51% days in the last three months. During this time, it delivered on average +0.06% per day. It delivered it's best daily return of +7.6%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 11 Dec, 2018 and went on till 19 Dec, 2018. This bullish trend returned +10.45% to investors.
The last 12 months saw BBTC's investors making profits in 5 months and incurring losses in 7 months. During the last year, BBTC and NIFTY-50 index had the same number of profitable months. BBTC significantly outperformed NIFTY-50 index in Apr 2018, when it returned +31.44% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. BBTC and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both BBTC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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BBTC 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 BBTC's volatility from 2 Nov, 2018 to 14 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 BBTC has significant negative skewness in it's return distribution. This indicates that BBTC is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than BBTC. Therefore, NIFTY-50 must receive a lower allocation than BBTC in your portfolio. NIFTY-50 index usually has shorter drawdown period than BBTC.
Based on your interest in BBTC you may find it interesting to know that BAJFINANCE is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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