ESCORTS INDIA LTD

730.4 +9.73 (+1.33%) Buy

ESCORTS investors rewarded by market outperformance

13 min read

ESCORTS INDIA LTD was among the best performers on Wednesday. It returned +1.33% to close at 730.4. It is currently trading -27% below it's 52 week high of 1002.3.

[Themes containing ESCORTS]

Buy-and-Hold investors in ESCORTS experienced a maximum drawdown of -14.59% over the last three months. It returned +22.92% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +4.63%.

Trend

ESCORTS has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, ESCORTS outperformed the NIFTY-50 index on 52% days.

During the last three months ESCORTS was mostly profitable and delivered on average +0.35% per day. It's best return during this period (of +7.57%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -5.34%) was on Wednesday, 5 Dec, 2018. There was initially a bearish trend during this period which started on 4 Dec, 2018 and went on till 10 Dec, 2018. The trend delivered -15.44% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 20 Dec, 2018. This bullish trend delivered +14.03% to investors.

On monthly basis, ESCORTS delivered profits in more months over the last year, than losses. ESCORTS delivered profits in more months than NIFTY-50 index. ESCORTS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -29.66% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ESCORTS had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Oct 2018 to Jan 2019) during which period it delivered +16.79%. It is interesting to note that both ESCORTS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury.
-- Merton Miller

ESCORTS 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 ESCORTS's volatility from 1 Nov, 2018 to 15 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 ESCORTS 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 ESCORTS derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in ESCORTS), CUB is a mid cap that deserves to be closely tracked for investment opportunities.

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