7.6 -0.24 (-3.18%) Sell

Stop-loss on the minds of KWALITY investors as it significantly underperforms

16 min read

KWALITY was among the worst performers today. On a longer term basis, investors in KWALITY LIMITED made -0.19% per day. Friday's performance of -3.18% was a significant underperformance compared to it's daily average.

[Themes containing KWALITY]

Buy-and-Hold investors in KWALITY experienced a maximum drawdown of -35.11% over the last three months. It lost -19.15% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +5.16%.


KWALITY has been underperforming the NIFTY-50 index in recent time, after having outperformed till 1 Jan, 2016. Over the last 3 years and 1 month, KWALITY underperformed the NIFTY-50 index on 55% days.

KWALITY returned losses on 62% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -5.0%, during this period, on Wednesday, 5 Dec, 2018. There was initially a bearish trend during this period which started on 22 Oct, 2018 and went on till 1 Nov, 2018. The trend delivered -42.23% losses to investors. This was followed by a bullish trend that started on 16 Nov, 2018 and ended on 29 Nov, 2018. This bullish trend delivered +42.63% to investors.

KWALITY had 2 profitable and 10 loss making months over the last year. During the last year, KWALITY underperformed NIFTY-50 index on monthly return basis. KWALITY significantly outperformed NIFTY-50 index in Nov 2018, when it returned +72.66% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. KWALITY had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Feb 2018 to Jul 2018) during which period it delivered -153.1%.

A stock broker is one who invests other people's money until its all gone.
-- Woody Allen

KWALITY is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant surge in KWALITY's volatility from 19 Oct, 2018 to 24 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 KWALITY has positive skewness in it's return distribution. This indicates that investors can expect KWALITY to make attempts to recover from drawdowns quickly. Which makes KWALITY a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in KWALITY), if you are evaluating KWALITY as an investment candidate, then you should read about PODDARHOUS which has delivered similar performance and can help diversify your portfolio.

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