HONEYWELL AUTOMATION IND showed marginal outperformance on Friday. It increased by +0.47% to close at 22040.2. On a day when the overall market breadth was 71%, it closed higher than 73% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
Buy-and-Hold investors in HONAUT experienced a maximum drawdown of -8.7% over the last three months. It increased by +15.73% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +8.5%.
HONAUT has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 8 Nov, 2016 to 4 Dec, 2018. Over the last 3 years and 1 month, HONAUT outperformed the NIFTY-50 index on 50% days. Which indicates that on days HONAUT outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
During the last three months HONAUT was mostly profitable and delivered on average +0.24% per day. It's best return during this period (of +3.05%) was on Thursday, 15 Nov, 2018. While it's worst loss in the same period (of -2.9%) was on Friday, 21 Dec, 2018. The longest stort-term trends during this period were 7 profitable and losing days. The bullish trend (which returned +9.71%) started on 24 Oct, 2018 and went on till 1 Nov, 2018 while the bearish trend (which returned -8.45%) started on 18 Dec, 2018 and went on till 27 Dec, 2018.
During the last year HONAUT had 6 profitable months and 6 loss making months. HONAUT returned profits in more months than NIFTY-50 index. HONAUT significantly outperformed NIFTY-50 index in Aug 2018, when it returned +13.91% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HONAUT and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both HONAUT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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HONAUT 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 HONAUT's volatility from 26 Oct, 2018 to 11 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 HONAUT 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.
NIFTY-50 index has more chance of extreme outcomes than HONAUT. Therefore, NIFTY-50 must receive a lower allocation than HONAUT in your portfolio. NIFTY-50 index usually has shorter drawdown period than HONAUT.
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