INDIAN ENERGY EXC LTD

164.25 -0.25 (-0.15%) Sell

IEX investors looking to cut their losses short

13 min read

INDIAN ENERGY EXC LTD showed weakness today. It fell by -0.15% to close at 164.25. It's recent 5 day performance has been +0.52%, +4.3%, -0.41%, +1.06% and +0.55%.

IEX is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for IEX's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -5.16%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to IEX.

Trend

IEX has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 27 Feb, 2018 to 17 Oct, 2018. Over the last 1 year and 2 months, IEX underperformed the NIFTY-50 index on 52% days.

IEX returned losses on 54% days in the last three months. During this time, it delivered on average +13.48% per day. It delivered it's best daily return of +901.6%, during this period, on Wednesday, 17 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +903.11%) started on 12 Oct, 2018 and went on till 17 Oct, 2018 while the bearish trend (which returned -5.3%) started on 3 Dec, 2018 and went on till 6 Dec, 2018.

During the last year IEX had 6 profitable months and 6 loss making months. Profitable number of months of IEX and NIFTY-50 index were the same. IEX significantly outperformed NIFTY-50 index in Mar 2018, when it returned +10.01% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. IEX and NIFTY-50 index, both had periods of 2 consecutive profitable months.

The speed of your success is limited only by your dedication and what you're willing to sacrifice.
-- Nathan W. Morris

IEX 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 IEX's volatility from 17 Oct, 2018 to 30 Oct, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that IEX has significant negative skewness in it's return distribution. This indicates that IEX is very risky for short-term investment and can significantly underperform for long durations.

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

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