HCC continues to mint money for it's investors
18 Jan, 201913 min read
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HINDUSTAN CONSTRUCTION CO outperformed today. It surged by +2.29% to close at 13.4. It's recent 5 day performance has been -0.38%, +1.15%, +0.39%, +0.78% and -4.1%.
HCC is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning +11.67%) for HCC's investors than trading long signals.
HCC has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 25 Apr, 2017 to 20 Jul, 2018. Over the last 3 years and 1 month, HCC underperformed the NIFTY-50 index on 54% days.
HCC returned losses on 61% days in the last three months. During this time, it delivered on average +0.26% per day. It delivered it's best daily return of +19.63%, during this period, on Monday, 31 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +6.36%) started on 11 Dec, 2018 and went on till 14 Dec, 2018 while the bearish trend (which returned -21.85%) started on 20 Nov, 2018 and went on till 26 Nov, 2018.
During the last year HCC had 5 profitable months and 7 loss making months. Profitable number of months of HCC and NIFTY-50 index were the same. HCC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -37.29% compared to -6.42% returned by NIFTY-50 index in Sep 2018. HCC had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -59.78%. It is interesting to note that both HCC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Innovation distinguishes between a leader and a follower.
-- Steve Jobs
HCC is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in HCC's volatility from 19 Oct, 2018 to 18 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 HCC has significant negative skewness in it's return distribution. This indicates that HCC is very risky for short-term investment and can significantly underperform for long durations.
Investors trading in HCC derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than HCC. Therefore, NIFTY-50 must receive a lower allocation than HCC in your portfolio. NIFTY-50 index usually has shorter drawdown period than HCC.
Based on your interest in HCC you may find it interesting to know that RESPONIND has shown remarkable performance this year and deserves to be on every investors' watchlist.
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