2135.85 -12.23 (-0.57%) Buy

Want to invest in HDFCBANK? Wait as it underperformed broader market

13 min read

HDFCBANK underperformed broader market today. On a longer term basis, investors in HDFC BANK LTD made +0.1% per day. Tuesday's performance of -0.57% was a significant underperformance compared to it's daily average.

[Themes containing HDFCBANK]

HDFCBANK showed a up trend over the last 3 months. During this period HDFCBANK returned +7.61% . There was a long signal during this period which returned +6.56%.


HDFCBANK has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, HDFCBANK outperformed the NIFTY-50 index on 51% days.

During the last three months HDFCBANK was mostly profitable and delivered on average +0.12% per day. It's best return during this period (of +2.21%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -1.78%) was on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 25 Oct, 2018 and went on till 31 Oct, 2018. The trend delivered -4.1% losses to investors. This was followed by a bullish trend that started on 13 Nov, 2018 and ended on 19 Nov, 2018. This bullish trend delivered +4.76% to investors.

On monthly basis, HDFCBANK delivered profits and losses in equal number of months. HDFCBANK delivered profits in more months than NIFTY-50 index. HDFCBANK significantly outperformed NIFTY-50 index in Nov 2018, when it returned +11.34% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HDFCBANK had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Mar 2018 to May 2018) during which period it delivered +11.56%. It is interesting to note that both HDFCBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
-- William A. Feather

HDFCBANK 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 HDFCBANK's volatility from 29 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 HDFCBANK 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 HDFCBANK derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

Based on your interest in HDFCBANK you may find it interesting to know that BATAINDIA is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter