1.1 -0.05 (-4.35%) Buy

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

13 min read

CHROMATIC was among the worst performers today. On a longer term basis, investors in CHROMATIC INDIA LTD made -0.01% per day. Tuesday's performance of -4.35% was a significant underperformance compared to it's daily average.

[Themes containing CHROMATIC]

CHROMATIC showed a up trend over the last 3 months. During this period CHROMATIC grew by +10.0% and saw a maximum drawdown of -18.52%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in CHROMATIC till volatility reduces and a clear trend emerges.


CHROMATIC has been underperforming the NIFTY-50 index in recent time, after having outperformed till 6 Apr, 2016. Over the last 3 years and 1 month, CHROMATIC underperformed the NIFTY-50 index on 55% days.

During the last three months CHROMATIC delivered losses on 70% days. However, it still managed to end this period in a profit. It's best return during this period (of +10.0%) was on Monday, 7 Jan, 2019. While it's worst loss in the same period (of -5.0%) was on Thursday, 20 Dec, 2018. There was initially a bullish trend during this period which started on 5 Nov, 2018 and went on till 14 Nov, 2018. The bullish trend returned +9.76% to investors. This was followed by a bearish trend that started on 15 Jan, 2019 and ended on 17 Jan, 2019. This bearish trend lost -11.55% of investor capital.

CHROMATIC had 2 profitable and 10 loss making months over the last year. During the last year, CHROMATIC underperformed NIFTY-50 index on monthly return basis. CHROMATIC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -27.03% compared to -6.42% returned by NIFTY-50 index in Sep 2018. CHROMATIC had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Feb 2018 to Jul 2018) during which period it delivered -62.45%. It is interesting to note that both CHROMATIC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight.
-- Daniel Drew

CHROMATIC 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 CHROMATIC's volatility from 23 Oct, 2018 to 22 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 CHROMATIC 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.

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

Based on your interest in CHROMATIC you may find it interesting to know that ~MUTHOOTGRP and BAJFINANCE have both shown remarkable performance and deserve to be on every investors' watchlist.

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