NH continues its fall as more investors loose confidence
18 Jan, 201913 min read
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NARAYANA HRUDAYALAYA LTD. delivered lacklustre performance today. It returned -0.2% to close at 197.6. During the last week it returned -1.32% and saw a maximum drawdown of -3.07% before bouncing back.
Buy-and-Hold investors in NH experienced a maximum drawdown of -25.05% over the last three months. It returned -5.39% during this 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.
NH has been underperforming the NIFTY-50 index in recent time, after having outperformed till 9 Feb, 2016. Over the last 3 years and 12 days, NH underperformed the NIFTY-50 index on 55% days.
NH returned losses on 61% 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 +5.56%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 23 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +17.95% to investors. This was followed by a bearish trend that started on 24 Dec, 2018 and ended on 1 Jan, 2019. This bearish trend lost -6.41% of investor capital.
On monthly basis, NH delivered losses in more months over the last year, than profits. NH delivered profits less regularly than NIFTY-50 index. NH was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -15.35% compared to -6.42% returned by NIFTY-50 index in Sep 2018. NH had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -22.81%. It is interesting to note that both NH and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
I have probably purchased fifty 'hot tips' in my career, maybe even more. When I put them all together, I know I am a net loser.
-- Charles Schwab
NH 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 NH's volatility from 10 Dec, 2018 to 3 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 NH has significant negative skewness in it's return distribution. This indicates that NH is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than NH. Therefore, NIFTY-50 must receive a lower allocation than NH in your portfolio. NIFTY-50 index usually has shorter drawdown period than NH.
On a general note (since you are interested in NH), IGARASHI is a small cap that deserves to be closely tracked for investment opportunities.
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