KOTHARIPET is a falling knife, continues to bleed every investor trying to catch it
22 Jan, 201913 min read
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KOTHARI PETROCHEM LTD is a falling knife that can bleed you if you catch it today. It lost -3.29% to close at 20.6. It's recent 5 day performance has been -0.93%, -2.27%, -0.45%, +0.91% and -2.45%.
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KOTHARIPET is currently in a down trend. Over the last three months Buy-and-Hold has been a better strategy (returning +7.85%) for KOTHARIPET's investors than shorting it.
KOTHARIPET has been underperforming the NIFTY-50 index in recent time, after having outperformed till 5 Jan, 2016. Over the last 3 years and 1 month, KOTHARIPET underperformed the NIFTY-50 index on 54% days.
KOTHARIPET returned losses on 58% days in the last three months. During this time, it delivered on average +0.15% per day. It delivered it's best daily return of +9.69%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 12 Nov, 2018 and went on till 15 Nov, 2018. The bullish trend returned +10.95% to investors. This was followed by a bearish trend that started on 16 Nov, 2018 and ended on 21 Nov, 2018. This bearish trend lost -6.46% of investor capital.
KOTHARIPET had 3 profitable and 9 loss making months over the last year. During the last year, KOTHARIPET underperformed NIFTY-50 index on monthly return basis. KOTHARIPET significantly outperformed NIFTY-50 index in Apr 2018, when it returned +26.52% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. KOTHARIPET had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -29.29%. It is interesting to note that both KOTHARIPET and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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KOTHARIPET 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 KOTHARIPET's volatility from 24 Oct, 2018 to 26 Dec, 2018. 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 KOTHARIPET has significant negative skewness in it's return distribution. This indicates that KOTHARIPET is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than KOTHARIPET. Therefore, NIFTY-50 must receive a lower allocation than KOTHARIPET in your portfolio. NIFTY-50 index usually has shorter drawdown period than KOTHARIPET.
Based on your interest in KOTHARIPET you may find it interesting to know that HATSUN is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to HATSUN or sufficiently diversifying your portfolio.
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