INDIAN OVERSEAS BANK underperformed on Friday. It fell by -0.69% to close at 14.3. It is currently trading -39% below it's 52 week high of 23.45.
Buy-and-Hold investors in IOB experienced a maximum drawdown of -8.25% over the last three months. It increased by +11.72% 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.
IOB has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 1 Apr, 2016 to 28 Aug, 2018. Over the last 3 years and 1 month, IOB underperformed the NIFTY-50 index on 56% days.
During the last three months IOB delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.9%) was on Friday, 26 Oct, 2018. While it's worst loss in the same period (of -3.63%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 26 Dec, 2018 and went on till 1 Jan, 2019. This bullish trend returned +1.68% to investors.
During the last year IOB had 5 profitable months and 7 loss making months. Profitable number of months of IOB and NIFTY-50 index were the same. IOB was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -16.03% compared to -6.42% returned by NIFTY-50 index in Sep 2018. IOB and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both IOB and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
The only way to beat an index is to invest in something other than the index. Why would you, when the only source of long-term risk and return data is the index ?
-- Hebner, Mark.
IOB 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 IOB's volatility from 30 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 IOB has significant negative skewness in it's return distribution. This indicates that IOB is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than IOB. Therefore, NIFTY-50 must receive a lower allocation than IOB in your portfolio. NIFTY-50 index usually has shorter drawdown period than IOB.
Based on your interest in IOB you may find it interesting to know that NIITTECH, VINATIORGA and ASTRAZEN are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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