1701.4 +12.39 (+0.73%) Buy

Joy for HINDUNILVR investors as it manages to marginally outperform broader market

13 min read

HINDUSTAN UNILEVER LTD. managed to outperform the broader market today. It surged by +0.73% to close at 1701.4. During the last week it surged by +1.81% and saw a maximum drawdown of -1.54% before bouncing back.

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Buy-and-Hold investors in HINDUNILVR experienced a maximum drawdown of -15.69% over the last three months. It delivered -3.77% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +3.06%.


HINDUNILVR has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 25 Oct, 2016 to 14 Nov, 2018. Over the last 2 years and 11 months, HINDUNILVR outperformed the NIFTY-50 index on 53% days.

HINDUNILVR returned losses on 52% days in the last three months. During this time, it delivered on average -0.05% per day. It delivered it's worst daily return of -4.57%, during this period, on Monday, 3 Sep, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +3.81%) started on 16 Oct, 2018 and went on till 22 Oct, 2018 while the bearish trend (which returned -10.0%) started on 3 Sep, 2018 and went on till 6 Sep, 2018.

The last 12 months saw HINDUNILVR's investors making profits in 9 months and incurring losses in 3 months. During the last year, HINDUNILVR delivered profits in more months than NIFTY-50 index. HINDUNILVR significantly outperformed NIFTY-50 index in Apr 2018, when it returned +11.85% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HINDUNILVR had a longer winning streak of profitable months than NIFTY-50 index. It went up in 6 straight months (from Mar 2018 to Aug 2018) during which period it delivered +30.77%. It is interesting to note that both HINDUNILVR and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

There is nothing wrong with changing a plan when the situation has changed.
-- Seneca

HINDUNILVR is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in HINDUNILVR's volatility from 28 Aug, 2018 to 15 Oct, 2018. While there was a significant surge in the NIFTY-50 index's volatility from 21 Aug, 2018 to 8 Oct, 2018.

Advanced/professional short-term investors should note that HINDUNILVR 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 HINDUNILVR derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.

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

Based on your interest in HINDUNILVR you may find it interesting to know that SRIPIPES and ~HOMEAPPLIANCES are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).

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