Looking to invest in JKPAPER? Look for alternatives because it underperformed
22 Jan, 201913 min read
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JK PAPER LIMITED underperformed today. It fell by -1.3% to close at 148.3. It's recent 5 day performance has been +0.43%, -2.38%, +0.59%, +0.73% and +2.51%.
JKPAPER showed a bearish trend over the last 3 months. During this period JKPAPER fell by -5.78% and saw a maximum drawdown of -20.38%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in JKPAPER till volatility reduces and a clear trend emerges.
JKPAPER has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 29 Mar, 2016 to 9 Nov, 2018. Over the last 3 years and 1 month, JKPAPER outperformed the NIFTY-50 index on 49% days. Which indicates that on days JKPAPER 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 JKPAPER was mostly loss making and delivered on average -0.07% per day. It's best return during this period (of +6.59%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.05%) was on Thursday, 6 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Dec, 2018 and ended on 24 Dec, 2018. This bearish trend lost -8.09% of investor capital.
During the last year JKPAPER had 4 profitable months and 8 loss making months. JKPAPER returned profits in fewer months than NIFTY-50 index. JKPAPER significantly outperformed NIFTY-50 index in Aug 2018, when it returned +26.02% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. JKPAPER had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered -12.67%. It is interesting to note that both JKPAPER 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
JKPAPER 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 JKPAPER's volatility from 2 Nov, 2018 to 14 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 JKPAPER 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.
JKPAPER has more chance of extreme outcomes than the NIFTY-50 index. Therefore, JKPAPER must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than JKPAPER.
On a general note (since you are interested in JKPAPER), ~MUTHOOTGRP has performed really well and deserves to be closely tracked for investment opportunities.
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