58.2 -2.4 (-4.12%) Sell

The party never started for IDBI investors as it was among the worst performers

13 min read

IDBI BANK LIMITED is a falling knife that can bleed you if you catch it today. It returned -4.12% to close at 58.2. During the last week it returned -7.18% and saw a maximum drawdown of -7.18%.

[Themes containing IDBI]

Buy-and-Hold investors in IDBI experienced a maximum drawdown of -9.98% over the last three months. It returned -1.94% during this down trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals. The net profit from Short signals was +1.43%.


IDBI has been underperforming the NIFTY-50 index in recent time, after having outperformed till 1 Jan, 2016. Over the last 3 years and 1 month, IDBI underperformed the NIFTY-50 index on 54% days.

IDBI returned losses on 53% days in the last three months. During this time, it delivered on average -0.03% per day. It delivered it's best daily return of +4.44%, during this period, on Wednesday, 9 Jan, 2019. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 30 Oct, 2018. The bullish trend returned +1.35% to investors. This was followed by a bearish trend that started on 24 Dec, 2018 and ended on 27 Dec, 2018. This bearish trend lost -1.13% of investor capital.

On monthly basis, IDBI delivered profits and losses in equal number of months. IDBI delivered profits in more months than NIFTY-50 index. IDBI significantly outperformed NIFTY-50 index in Feb 2018, when it returned +23.33% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. IDBI had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Mar 2018 to Jun 2018) during which period it delivered -27.32%. It is interesting to note that both IDBI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages.
-- Henry Ford

IDBI is becoming more 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 IDBI's volatility from 19 Oct, 2018 to 4 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 IDBI 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 IDBI derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in IDBI), ~CHEMICALS has performed really well and deserves to be closely tracked for investment opportunities.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter