MARUTI SUZUKI INDIA LTD. managed to marginally outperform the broader market on Tuesday. It gained +0.5% to close at 7772.35. On a day when the overall market breadth was 71%, it closed higher than 63% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.19%.
MARUTI is currently in a up trend. Over the last three months trading long signals has not been a profitable strategy for MARUTI's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -5.33%). It is therefore better to tread with caution in the current uptrend by limiting your allocation to MARUTI.
MARUTI has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, MARUTI outperformed the NIFTY-50 index on 50% days. Which indicates that on days MARUTI outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
MARUTI returned losses on 57% days in the last three months. During this time, it delivered on average -0.07% per day. It delivered it's best daily return of +6.31%, during this period, on Friday, 2 Nov, 2018. There was initially a bearish trend during this period which started on 3 Oct, 2018 and went on till 9 Oct, 2018. The trend delivered -10.63% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +8.34% to investors.
MARUTI had 5 profitable and 7 loss making months over the last year. During the last year, MARUTI underperformed NIFTY-50 index on monthly return basis. MARUTI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -19.22% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MARUTI 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 -34.23%. It is interesting to note that both MARUTI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
-- Peter Lynch.
MARUTI 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 MARUTI's volatility from 21 Sep, 2018 to 4 Dec, 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 MARUTI 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 MARUTI derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than MARUTI. Therefore, NIFTY-50 must receive a lower allocation than MARUTI in your portfolio. NIFTY-50 index usually has shorter drawdown period than MARUTI.
On a general note (since you are interested in MARUTI), three instruments that deserve special mention are DMART, ~MKTCAP201TO250 and BRITANNIA. They have all outperformed the market and must be closely watched for investment opportunities.
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