Doubt in the minds of ONGC investors as it destroyed investor wealth

OIL AND NATURAL GAS CORP. is a falling knife that can bleed you if you catch it today. It fell by -0.44% to close at 147.6. It's recent 5 day performance has been +0.95%, +2.48%, +1.13%, +2.61% and +0.73%.

[Themes containing ONGC]

ONGC is currently in a bearish trend. The previous short signal in ONGC has not been profitable for investors in general. If you are short on ONGC at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

ONGC has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 1 Aug, 2016 to 15 Dec, 2016. Over the last 2 years and 12 months, ONGC outperformed the NIFTY-50 index on 49% days. Which indicates that on days ONGC 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 ONGC was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +3.4%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -14.7%) was on Friday, 5 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +12.32%) started on 10 Oct, 2018 and went on till 16 Oct, 2018 while the bearish trend (which returned -5.88%) started on 15 Nov, 2018 and went on till 21 Nov, 2018.

During the last year ONGC had 5 profitable months and 7 loss making months. ONGC returned profits in fewer months than NIFTY-50 index. ONGC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Oct 2018, returned -14.39% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ONGC had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -23.68%. It is interesting to note that both ONGC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The Stock Market is designed to transfer money from the Active to the Patient.
-- Warren Buffett

ONGC is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ONGC's volatility from 5 Oct, 2018 to 13 Nov, 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 ONGC 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 ONGC derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.

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

Based on your interest in ONGC you may find it interesting to know that BRITANNIA has shown remarkable performance and deserves to be on every investors' watchlist.