363.65 -10.35 (-2.85%) Buy

CENTUM investors herd to book profits while the going is good

14 min read

CENTUM ELECTRONICS LTD was among the worst performers today. It fell by -2.85% to close at 363.65. It's recent 5 day performance has been -3.7%, +0.09%, -0.41%, +0.24% and -1.76%.

[Themes containing CENTUM]

CENTUM showed a bullish trend over the last 3 months. During this period CENTUM delivered +1.3% and saw a maximum drawdown of -18.91%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in CENTUM till volatility reduces and a clear trend emerges.


CENTUM has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 11 Jan, 2016 to 5 Sep, 2018. Over the last 3 years and 1 month, CENTUM underperformed the NIFTY-50 index on 56% days.

During the last three months CENTUM delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.04%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -4.71%) was on Thursday, 15 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 27 Nov, 2018 and ended on 4 Dec, 2018. This bearish trend lost -10.81% of investor capital.

During the last year CENTUM had 3 profitable months and 9 loss making months. CENTUM returned profits in fewer months than NIFTY-50 index. CENTUM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -19.67% compared to -6.42% returned by NIFTY-50 index in Sep 2018. CENTUM had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from May 2018 to Aug 2018) during which period it delivered -40.11%. It is interesting to note that both CENTUM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Money won't create success, the freedom to make it will.
-- Nelson Mandela

CENTUM 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 surge in CENTUM's volatility from 23 Oct, 2018 to 5 Dec, 2018. 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 CENTUM has significant negative skewness in it's return distribution. This indicates that CENTUM is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in CENTUM), two instruments that have delivered similar performance as CENTUM are PAPERPROD and SUNTV. They are suitable as good alternative investment candidates that can diversify your portfolio.

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