NUCLEUS investors treading cautiously as performance is muted

NUCLEUS SOFTWARE EXPORTS trailed the broader market on Friday. It returned -0.69% to close at 368.6. On a day when the overall market breadth was 71%, it closed higher than 71% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing NUCLEUS]

NUCLEUS is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for NUCLEUS's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +3.12%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to NUCLEUS.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

NUCLEUS has been underperforming the NIFTY-50 index in recent time, after having outperformed till 1 Dec, 2017. Over the last 3 years and 1 month, NUCLEUS outperformed the NIFTY-50 index on 45% days. Which indicates that on days NUCLEUS 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 NUCLEUS delivered losses on 55% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.94%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -3.02%) was on Wednesday, 14 Nov, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 31 Oct, 2018. The bullish trend returned +10.18% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -6.54% of investor capital.

On monthly basis, NUCLEUS delivered losses in more months over the last year, than profits. NUCLEUS delivered profits less regularly than NIFTY-50 index. NUCLEUS significantly outperformed NIFTY-50 index in Aug 2018, when it returned +32.2% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. NUCLEUS had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -28.56%. It is interesting to note that both NUCLEUS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"I'm involved in the stock market, which is fun and, sometimes, very painful.

NUCLEUS is becoming more 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 NUCLEUS's volatility from 30 Oct, 2018 to 9 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 NUCLEUS has significant negative skewness in it's return distribution. This indicates that NUCLEUS is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in NUCLEUS), IGARASHI is a small cap that deserves to be closely tracked for investment opportunities.