HIND RECTIFIER LIMITED underperformed broader market on Wednesday. It delivered -0.79% to close at 113.0. On a day when the overall market breadth was 70%, it closed higher than 74% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.
HIRECT is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning +4.48%) for HIRECT's investors than trading long signals.
HIRECT has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 11 Aug, 2017 to 23 Apr, 2018. Over the last 3 years and 1 month, HIRECT underperformed the NIFTY-50 index on 55% days.
HIRECT returned losses on 56% days in the last three months. During this time, it delivered on average +0.12% per day. It delivered it's best daily return of +15.56%, during this period, on Tuesday, 30 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +13.35%) started on 10 Jan, 2019 and went on till 15 Jan, 2019 while the bearish trend (which returned -10.32%) started on 16 Jan, 2019 and went on till 21 Jan, 2019.
The last 12 months saw HIRECT's investors making profits in 5 months and incurring losses in 7 months. During the last year, HIRECT delivered profits in more months than NIFTY-50 index. HIRECT significantly outperformed NIFTY-50 index in Aug 2018, when it returned +18.58% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HIRECT 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 -17.24%. It is interesting to note that both HIRECT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
-- Warren Buffett
HIRECT 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 HIRECT's volatility from 24 Oct, 2018 to 6 Dec, 2018. 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 HIRECT has significant negative skewness in it's return distribution. This indicates that HIRECT is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than HIRECT. Therefore, NIFTY-50 must receive a lower allocation than HIRECT in your portfolio. NIFTY-50 index usually has shorter drawdown period than HIRECT.
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