49.15 -0.69 (-1.4%) Sell

HINDCOPPER is a falling knife, continues to bleed every investor trying to catch it

13 min read

HINDUSTAN COPPER LTD significantly underperformed today. It returned -1.4% to close at 49.15. During the last week it returned -0.41% and saw a maximum drawdown of -1.9% before bouncing back.

[Themes containing HINDCOPPER]

Buy-and-Hold investors in HINDCOPPER experienced a maximum drawdown of -13.83% over the last three months. It grew by +2.5% during this 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.


HINDCOPPER has been underperforming the NIFTY-50 index in recent time, after having outperformed till 6 Nov, 2017. Over the last 3 years and 1 month, HINDCOPPER underperformed the NIFTY-50 index on 57% days.

During the last three months HINDCOPPER delivered losses on 58% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.24%) was on Monday, 17 Dec, 2018. While it's worst loss in the same period (of -2.57%) was on Monday, 10 Dec, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +9.68% to investors. This was followed by a bearish trend that started on 21 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -7.01% of investor capital.

On monthly basis, HINDCOPPER delivered losses in more months over the last year, than profits. HINDCOPPER delivered profits less regularly than NIFTY-50 index. HINDCOPPER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.73% compared to -6.42% returned by NIFTY-50 index in Sep 2018. HINDCOPPER 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 -16.68%. It is interesting to note that both HINDCOPPER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Everything is always feasible if you run a corporate finance exercise: you can always try to come out with a justification on how things could work. But the real issue is to say how do you translate that into practice.

HINDCOPPER 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 HINDCOPPER's volatility from 19 Oct, 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 HINDCOPPER has significant negative skewness in it's return distribution. This indicates that HINDCOPPER is very risky for short-term investment and can significantly underperform for long durations.

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

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

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