HINDUSTAN ZINC LIMITED managed to outperform the broader market on Friday. It surged by +0.24% to close at 272.4. On a day when the overall market breadth was 71%, it closed higher than 83% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
HINDZINC showed a bullish trend over the last 3 months. During this period HINDZINC surged by +2.23% . It has been unusually choppy during this period. Long term investors are better off avoiding investing in HINDZINC till volatility reduces and a clear trend emerges.
HINDZINC has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 7 Jan, 2016 to 19 Apr, 2018. Over the last 3 years and 1 month, HINDZINC outperformed the NIFTY-50 index on 49% days. Which indicates that on days HINDZINC outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
HINDZINC was profitable on 50% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's best daily return of +2.74%, during this period, on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 4 profitable days, which started on 29 Nov, 2018 and went on till 4 Dec, 2018. This bullish trend returned +4.58% to investors.
During the last year HINDZINC had 6 profitable months and 6 loss making months. HINDZINC returned profits in more months than NIFTY-50 index. HINDZINC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -9.94% compared to -6.42% returned by NIFTY-50 index in Sep 2018. HINDZINC and NIFTY-50 index, both had periods of 2 consecutive profitable months.
"Wealth consists not in having great possessions, but in having few wants.
HINDZINC 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 fall in HINDZINC's volatility from 19 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 HINDZINC has positive skewness in it's return distribution. This indicates that investors can expect HINDZINC to make attempts to recover from drawdowns quickly. Which makes HINDZINC a good candidate for momentum based trading on short-term bullish trends or counter-trends.
Investors trading in HINDZINC derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than HINDZINC. Therefore, NIFTY-50 must receive a lower allocation than HINDZINC in your portfolio. NIFTY-50 index usually has shorter drawdown period than HINDZINC.
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