16.25 -0.1 (-0.61%) Buy

GMRINFRA investors not showing any loss of confidence as it pauses to catch its breath

13 min read

GMR INFRASTRUCTURE LTD. underperformed today. It lost -0.61% to close at 16.25. It's recent 5 day performance has been -1.21%, +0.3%, +0.61%, -1.8% and -0.3%.

[Themes containing GMRINFRA]

GMRINFRA showed a up trend over the last 3 months. During this period GMRINFRA gained +3.5% and saw a maximum drawdown of -13.49%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GMRINFRA till volatility reduces and a clear trend emerges.


GMRINFRA has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, GMRINFRA underperformed the NIFTY-50 index on 54% days.

GMRINFRA returned losses on 58% days in the last three months. During this time, it delivered on average +0.07% per day. It delivered it's best daily return of +4.98%, during this period, on Wednesday, 9 Jan, 2019. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +9.67% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -10.48% of investor capital.

GMRINFRA had 4 profitable and 8 loss making months over the last year. During the last year, GMRINFRA underperformed NIFTY-50 index on monthly return basis. GMRINFRA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -23.22% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GMRINFRA 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 -28.84%. It is interesting to note that both GMRINFRA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

In order to succeed, your desire for success should be greater than your fear of failure.
-- Bill Cosby

GMRINFRA 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 GMRINFRA'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 GMRINFRA 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 GMRINFRA derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in GMRINFRA), three instruments that deserve special mention are ~MKTCAP201TO250, NIFTY-GS-15YRPLUS and BRITANNIA. They have all outperformed the market and must be closely watched for investment opportunities.

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