LUMAXIND investors not showing any loss of confidence as it pauses to catch its breath

LUMAX INDUSTRIES LTD underperformed broader market today. It lost -0.33% to close at 1681.45. It's recent 5 day performance has been +0.01%, -0.67%, +1.03%, -0.04% and +0.01%.

[Themes containing LUMAXIND]

LUMAXIND showed a flat trend over the last 3 months. During this period LUMAXIND returned -0.86% and saw a maximum drawdown of -7.79%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in LUMAXIND till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

LUMAXIND has been underperforming the NIFTY-50 index in recent time, after having outperformed till 7 May, 2018. Over the last 3 years and 1 month, LUMAXIND outperformed the NIFTY-50 index on 47% days. Which indicates that on days LUMAXIND outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

LUMAXIND returned losses on 54% days in the last three months. During this time, it delivered on average -0.0% per day. It delivered it's worst daily return of -5.07%, during this period, on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 5 Nov, 2018. The bullish trend returned +6.14% to investors. This was followed by a bearish trend that started on 26 Dec, 2018 and ended on 31 Dec, 2018. This bearish trend lost -2.5% of investor capital.

LUMAXIND had 6 profitable and 6 loss making months over the last year. LUMAXIND was profitable in more months than NIFTY-50 index. LUMAXIND significantly outperformed NIFTY-50 index in Feb 2018, when it returned +22.79% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. LUMAXIND had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -22.49%. It is interesting to note that both LUMAXIND and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Wealth is not his that has it, but his that enjoys it.
-- Benjamin Franklin

LUMAXIND 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 fall in LUMAXIND's volatility from 23 Oct, 2018 to 18 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 LUMAXIND has significant negative skewness in it's return distribution. This indicates that LUMAXIND is very risky for short-term investment and can significantly underperform for long durations.

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

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