Don't consider investing in HFCL now, it is risky at the moment
22 Jan, 201913 min read
Share with friends 
HFCL ranked among the worst performers today. On a longer term basis, investors in HIMACHAL FUT COM LTD made +0.1% per day. Tuesday's performance of -2.46% was a significant underperformance compared to it's daily average.
HFCL showed a strong up trend over the last 3 months. During this period HFCL returned +10.66% and saw a maximum drawdown of -17.41%. There was a long signal during this period which returned +3.81%.
HFCL has been underperforming the NIFTY-50 index in recent time, after having outperformed till 18 Sep, 2017. Over the last 3 years and 1 month, HFCL underperformed the NIFTY-50 index on 58% days.
During the last three months HFCL delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +12.21%) was on Tuesday, 8 Jan, 2019. While it's worst loss in the same period (of -4.0%) was on Monday, 12 Nov, 2018. There was initially a bearish trend during this period which started on 14 Nov, 2018 and went on till 20 Nov, 2018. The trend delivered -6.48% losses to investors. This was followed by a bullish trend that started on 14 Dec, 2018 and ended on 19 Dec, 2018. This bullish trend delivered +14.02% to investors.
On monthly basis, HFCL delivered profits and losses in equal number of months. HFCL delivered profits in more months than NIFTY-50 index. HFCL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -22.97% compared to -6.42% returned by NIFTY-50 index in Sep 2018. HFCL had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Jul 2018 to Sep 2018) during which period it delivered -31.61%. It is interesting to note that both HFCL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don't quit.
-- Conrad Hilton
HFCL is becoming more 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 HFCL's volatility from 19 Dec, 2018 to 7 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 HFCL has significant negative skewness in it's return distribution. This indicates that HFCL is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than HFCL. Therefore, NIFTY-50 must receive a lower allocation than HFCL in your portfolio. NIFTY-50 index usually has shorter drawdown period than HFCL.
Based on your interest in HFCL you may find it interesting to know that HATSUN is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.
... 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