20122.8 -244.15 (-1.21%) Sell

Don't go shopping for EICHERMOT now, it is underperforming the market

13 min read

EICHERMOT showed weakness today. On a longer term basis, investors in EICHER MOTORS LTD made +0.1% per day. Friday's performance of -1.21% was a underperformance compared to it's daily average.

[Themes containing EICHERMOT]

EICHERMOT showed a bearish trend over the last 3 months. During this period EICHERMOT delivered -6.95% and saw a maximum drawdown of -20.35%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in EICHERMOT till volatility reduces and a clear trend emerges.


EICHERMOT has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 7 Sep, 2017 to 7 Jan, 2019. Over the last 3 years and 1 month, EICHERMOT underperformed the NIFTY-50 index on 53% days.

EICHERMOT returned losses on 54% days in the last three months. During this time, it delivered on average -0.09% per day. It delivered it's worst daily return of -8.76%, during this period, on Wednesday, 2 Jan, 2019. The longest stort-term trend during this period was 6 losing days, which started on 20 Nov, 2018 and ended on 28 Nov, 2018. This bearish trend lost -7.36% of investor capital.

The last 12 months saw EICHERMOT's investors making profits in 5 months and incurring losses in 7 months. During the last year, EICHERMOT and NIFTY-50 index had the same number of profitable months. EICHERMOT was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -13.81% compared to -6.42% returned by NIFTY-50 index in Sep 2018. EICHERMOT had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered +15.63%.

Let him who would enjoy a good future waste none of his present.
-- Roger Babson

EICHERMOT 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 fall in EICHERMOT's volatility from 19 Oct, 2018 to 16 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 EICHERMOT has significant negative skewness in it's return distribution. This indicates that EICHERMOT is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in EICHERMOT derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in EICHERMOT you may find it interesting to know that ~CHEMICALS has shown remarkable performance and deserves to be on every investors' watchlist.

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