ECLERX SERVICES LTD performed worse than the broader market on Friday. It fell by -1.32% to close at 1080.05. On a day when the overall market breadth was 71%, it closed higher than 41% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
ECLERX showed a flat trend over the last 3 months. During this period ECLERX delivered -0.67% and saw a maximum drawdown of -13.54%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ECLERX till volatility reduces and a clear trend emerges.
ECLERX has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 26 Oct, 2016 to 7 Sep, 2018. Over the last 3 years and 1 month, ECLERX underperformed the NIFTY-50 index on 53% days.
During the last three months ECLERX delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +10.35%) was on Thursday, 15 Nov, 2018. While it's worst loss in the same period (of -4.4%) was on Friday, 30 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 16 Nov, 2018 and ended on 28 Nov, 2018. This bearish trend lost -9.98% of investor capital.
During the last year ECLERX had 5 profitable months and 7 loss making months. Profitable number of months of ECLERX and NIFTY-50 index were the same. ECLERX was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Aug 2018, returned -17.0% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ECLERX and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ECLERX and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"There can be no rise in the value of labour without a fall of profits.
ECLERX 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 ECLERX's volatility from 29 Oct, 2018 to 15 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 ECLERX has significant negative skewness in it's return distribution. This indicates that ECLERX is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than ECLERX. Therefore, NIFTY-50 must receive a lower allocation than ECLERX in your portfolio. NIFTY-50 index usually has shorter drawdown period than ECLERX.
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