Joy for KOTAKBANK investors as it shows marginal outperformance

KOTAK MAHINDRA BANK LTD managed to outperform the broader market today. It surged by +1.2% to close at 1237.1. It's recent 5 day performance has been -2.67%, -0.67%, +2.2%, +1.51% and +1.7%.

[Themes containing KOTAKBANK]

KOTAKBANK is currently in a bullish trend. The current bullish signal has generated a profit of +1.99% for KOTAKBANK's investors in the last three months.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

KOTAKBANK has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 5 Jan, 2017 to 16 Jul, 2018. Over the last 2 years and 12 months, KOTAKBANK outperformed the NIFTY-50 index on 50% days. Which indicates that on days KOTAKBANK outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

KOTAKBANK returned losses on 52% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's best daily return of +8.42%, during this period, on Friday, 7 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 26 Sep, 2018 and ended on 5 Oct, 2018. This bearish trend lost -11.63% of investor capital.

During the last year KOTAKBANK had 6 profitable months and 6 loss making months. Profitable number of months of KOTAKBANK and NIFTY-50 index were the same. KOTAKBANK was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -11.31% compared to -6.42% returned by NIFTY-50 index in Sep 2018. KOTAKBANK had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -15.33%. It is interesting to note that both KOTAKBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt

KOTAKBANK is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in KOTAKBANK's volatility from 19 Sep, 2018 to 1 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 KOTAKBANK 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 KOTAKBANK 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 KOTAKBANK. Therefore, NIFTY-50 must receive a lower allocation than KOTAKBANK in your portfolio. NIFTY-50 index usually has shorter drawdown period than KOTAKBANK.

Based on your interest in KOTAKBANK you may find it interesting to know that NIFTY50-DIV-POINT, ~HOMEAPPLIANCES and IGARASHI are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.