38.85 -0.69 (-1.77%) Sell

Don't even consider investing in BPL now, it is a high risk investment

13 min read

BPL LTD was among the worst performers on Friday. It fell by -1.77% to close at 38.85. On a day when the overall market breadth was 71%, it closed higher than 81% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing BPL]

BPL showed a bearish trend over the last 3 months. During this period BPL fell by -4.55% and saw a maximum drawdown of -17.69%. There was a short signal during this period which returned +4.55%.


BPL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 20 Dec, 2017 to 9 Oct, 2018. Over the last 3 years and 1 month, BPL underperformed the NIFTY-50 index on 59% days.

During the last three months BPL was mostly loss making and delivered on average -0.04% per day. It's best return during this period (of +6.62%) was on Tuesday, 18 Dec, 2018. While it's worst loss in the same period (of -5.28%) was on Monday, 22 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 3 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -12.43% of investor capital.

During the last year BPL had 4 profitable months and 8 loss making months. BPL returned profits in fewer months than NIFTY-50 index. BPL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -26.58% compared to -6.42% returned by NIFTY-50 index in Sep 2018. BPL and NIFTY-50 index, both had periods of 2 consecutive losing months. It is interesting to note that both BPL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you totally want to reduce risk, take no risk. Bury the money. Then you've got no risk at all.
-- Don Connelly

BPL 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 BPL's volatility from 19 Oct, 2018 to 9 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 BPL has significant negative skewness in it's return distribution. This indicates that BPL is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in BPL you may find it interesting to know that NIFTY-GS-15YRPLUS has shown remarkable performance and deserves to be on every investors' watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter