M&M FIN. SERVICES LTD

441.55 -6.11 (-1.38%) Sell

M&MFIN investors re-evaluating their investment strategy

16 min read

M&M FIN. SERVICES LTD delivered lacklustre performance on Friday. It delivered -1.38% to close at 441.55. On a day when the overall market breadth was 71%, it closed higher than 60% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing M&MFIN]

Buy-and-Hold investors in M&MFIN experienced a maximum drawdown of -10.88% over the last three months. It increased by +23.94% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

M&MFIN has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 28 Jan, 2016 to 30 Apr, 2018. Over the last 3 years and 1 month, M&MFIN outperformed the NIFTY-50 index on 50% days. Which indicates that on days M&MFIN 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 M&MFIN was mostly profitable and delivered on average +0.37% per day. It's best return during this period (of +7.12%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -4.72%) was on Thursday, 6 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 19 Oct, 2018 and went on till 25 Oct, 2018. This bullish trend returned +12.77% to investors.

The last 12 months saw M&MFIN's investors making profits in 5 months and incurring losses in 7 months. During the last year, M&MFIN and NIFTY-50 index had the same number of profitable months. M&MFIN was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.18% compared to -6.42% returned by NIFTY-50 index in Sep 2018. M&MFIN 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 -24.19%. It is interesting to note that both M&MFIN and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

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M&MFIN 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 M&MFIN's volatility from 19 Oct, 2018 to 16 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 M&MFIN 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 M&MFIN derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in M&MFIN you may find it interesting to know that TORNTPOWER, PHOENIXLTD and GICHSGFIN have all performed similar to M&MFIN and qualify as alternative investment candidates that must be evaluated for diversification.

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