EVEREST KANTO CYLINDERLTD

30.4 -1.29 (-4.25%) Sell

Prayers for EKC investors as it delivered massive losses

13 min read

EKC is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in EVEREST KANTO CYLINDERLTD made +0.13% per day. Tuesday's performance of -4.25% was a underperformance compared to it's daily average.

[Themes containing EKC]

Buy-and-Hold investors in EKC experienced a maximum drawdown of -24.64% over the last three months. It delivered +5.37% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

EKC has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 8 Jun, 2016 to 11 Dec, 2017. Over the last 3 years and 1 month, EKC outperformed the NIFTY-50 index on 42% days. Which indicates that on days EKC outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months EKC delivered losses on 64% days. However, it still managed to end this period in a profit. It's best return during this period (of +20.0%) was on Tuesday, 18 Dec, 2018. While it's worst loss in the same period (of -7.79%) was on Thursday, 15 Nov, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 10 Dec, 2018 and went on till 18 Dec, 2018. This bullish trend returned +34.47% to investors.

The last 12 months saw EKC's investors making profits in 4 months and incurring losses in 8 months. EKC was less consistent in delivering monthly returs than NIFTY-50 index. EKC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -27.03% compared to -6.42% returned by NIFTY-50 index in Sep 2018. EKC had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -51.69%. It is interesting to note that both EKC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"I finally know what distinguishes man from the other beasts: financial worries.

EKC 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 EKC's volatility from 31 Oct, 2018 to 6 Dec, 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 EKC has significant negative skewness in it's return distribution. This indicates that EKC is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in EKC), three instruments that are extremely volatile are IGARASHI, ~HOMEAPPLIANCES and IEX. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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