Don't cash in on CERA now, it outperformed most of it's peers

CERA outperformed the broader market today. On a longer term basis, investors in CERA SANITARYWARE LTD made +0.1% per day. Friday's performance of +2.79% was a outperformance compared to it's daily average.

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CERA showed a strong bullish trend over the last 3 months. During this period CERA increased by +11.55% and saw a maximum drawdown of -7.11%. There were 2 long signals during this period that returned a cumulative of +8.8% to investors.

Trend

Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

CERA has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 4 Dec, 2017 to 18 Dec, 2018. Over the last 3 years and 1 month, CERA underperformed the NIFTY-50 index on 50% days. Which indicates that on days CERA underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

During the last three months CERA delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.79%) was on Monday, 7 Jan, 2019. While it's worst loss in the same period (of -2.86%) was on Friday, 11 Jan, 2019. The longest stort-term trend during this period was 5 profitable days, which started on 11 Dec, 2018 and went on till 17 Dec, 2018. This bullish trend returned +2.43% to investors.

The last 12 months saw CERA's investors making profits in 4 months and incurring losses in 8 months. CERA was less consistent in delivering monthly returs than NIFTY-50 index. CERA significantly outperformed NIFTY-50 index in Jan 2019, when it returned +13.09% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. CERA had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Apr 2018 to Jul 2018) during which period it delivered -21.27%. It is interesting to note that both CERA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

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CERA is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in CERA's volatility from 19 Oct, 2018 to 1 Nov, 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 CERA has significant negative skewness in it's return distribution. This indicates that CERA is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in CERA you may find it interesting to know that HATSUN and LTI are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.