251.85 +0.4 (+0.16%) Sell

Search for alternative investments is on for COALINDIA investors as it underperforms

13 min read

COAL INDIA LTD trailed the broader market on Tuesday. It surged by +0.16% to close at 251.85. On a day when the overall market breadth was 71%, it closed higher than 31% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.19%.

[Themes containing COALINDIA]

Buy-and-Hold investors in COALINDIA experienced a maximum drawdown of -17.62% over the last three months. It delivered -10.26% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +3.31%.


COALINDIA has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 17 Aug, 2016 to 7 Dec, 2018. Over the last 2 years and 12 months, COALINDIA underperformed the NIFTY-50 index on 53% days.

COALINDIA was profitable on 51% days in the last three months. During this time, it delivered on average -0.17% per day. It delivered it's best daily return of +4.5%, during this period, on Friday, 12 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 2 Nov, 2018 and went on till 9 Nov, 2018. This bullish trend returned +2.78% to investors.

The last 12 months saw COALINDIA's investors making profits in 7 months and incurring losses in 5 months. During the last year, COALINDIA delivered profits in more months than NIFTY-50 index. COALINDIA significantly outperformed NIFTY-50 index in Jan 2018, when it returned +11.63% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. COALINDIA had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -17.31%. It is interesting to note that both COALINDIA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Many of life's failures are people who did not realize how close they were to success when they gave up.
-- Thomas Edison

COALINDIA 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 fall in COALINDIA's volatility from 8 Oct, 2018 to 21 Nov, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that COALINDIA 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 COALINDIA derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in COALINDIA you may find it interesting to know that LTI is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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