POWERGRID shows sign of weakness as investors do cost averaging
18 Dec, 201813 min read
Share with friends 
POWER GRID CORP. LTD. managed to marginally outperform the broader market today. It gained +1.97% to close at 196.35. It's recent 5 day performance has been +3.69%, +1.73%, 0.0%, +1.25% and +0.56%.
POWERGRID showed a flat trend over the last 3 months. During this period POWERGRID returned -0.98% and saw a maximum drawdown of -10.53%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in POWERGRID till volatility reduces and a clear trend emerges.
POWERGRID has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, POWERGRID outperformed the NIFTY-50 index on 50% days. Which indicates that on days POWERGRID outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
POWERGRID was profitable on 51% days in the last three months. During this time, it delivered on average -0.01% per day. It delivered it's best daily return of +3.69%, during this period, on Monday, 17 Dec, 2018. There was initially a bearish trend during this period which started on 5 Oct, 2018 and went on till 9 Oct, 2018. The trend delivered -1.43% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 18 Dec, 2018. This bullish trend delivered +9.2% to investors.
POWERGRID had 5 profitable and 7 loss making months over the last year. During the last year, POWERGRID underperformed NIFTY-50 index on monthly return basis. POWERGRID was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -10.94% compared to -6.42% returned by NIFTY-50 index in Sep 2018. POWERGRID 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 -11.65%.
Success usually comes to those who are too busy to be looking for it.
-- Henry David Thoreau
POWERGRID 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 surge in POWERGRID's volatility from 19 Sep, 2018 to 1 Oct, 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 POWERGRID 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 POWERGRID derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.
POWERGRID has more chance of extreme outcomes than the NIFTY-50 index. Therefore, POWERGRID must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than POWERGRID.
On a general note (since you are interested in POWERGRID), VMART has performed really well this year and deserves to be closely tracked for investment opportunities.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.
If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute