Don't consider buying BIOCON now, it is risky at the moment

BIOCON LIMITED. ranked worse than it's peers on Friday. It lost -0.85% to close at 652.05. It is currently trading +22% above it's 52 week low of 533.8 and is down only -7% from it's 52 week high.

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BIOCON showed a down trend over the last 3 months. During this period BIOCON lost -1.36% and saw a maximum drawdown of -11.31%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in BIOCON till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

BIOCON has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, BIOCON outperformed the NIFTY-50 index on 50% days. Which indicates that on days BIOCON outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months BIOCON was mostly profitable and delivered on average -0.0% per day. It's best return during this period (of +3.64%) was on Friday, 30 Nov, 2018. While it's worst loss in the same period (of -7.15%) was on Tuesday, 23 Oct, 2018. There was initially a bearish trend during this period which started on 1 Nov, 2018 and went on till 6 Nov, 2018. The trend delivered -4.55% losses to investors. This was followed by a bullish trend that started on 11 Jan, 2019 and ended on 17 Jan, 2019. This bullish trend delivered +4.25% to investors.

BIOCON had 6 profitable and 6 loss making months over the last year. BIOCON was profitable in more months than NIFTY-50 index. BIOCON significantly outperformed NIFTY-50 index in Apr 2018, when it returned +11.56% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. BIOCON had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -11.87%. It is interesting to note that both BIOCON and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you do chose to invest in a share, invest for the lifetime.
-- Sandeep Sahajpal

BIOCON 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 BIOCON's volatility from 26 Oct, 2018 to 17 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 BIOCON 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 BIOCON derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in BIOCON), three instruments that have performed similar to BIOCON are VGUARD, TRENT and PAGEIND. They must all be evaluated as alternative investment options and for diversification.