407.25 -5.91 (-1.45%) Buy

RADICO investors check their stop-losses as it underperforms

13 min read

RADICO significantly underperformed today. On a longer term basis, investors in RADICO KHAITAN LTD made +0.17% per day. Friday's performance of -1.45% was a significant underperformance compared to it's daily average.

[Themes containing RADICO]

Buy-and-Hold investors in RADICO experienced a maximum drawdown of -17.72% over the last three months. It gained +16.72% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


RADICO has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, RADICO outperformed the NIFTY-50 index on 46% days. Which indicates that on days RADICO outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

RADICO returned losses on 51% days in the last three months. During this time, it delivered on average +0.28% per day. It delivered it's best daily return of +7.86%, during this period, on Tuesday, 13 Nov, 2018. There was initially a bearish trend during this period which started on 3 Dec, 2018 and went on till 6 Dec, 2018. The trend delivered -9.19% losses to investors. This was followed by a bullish trend that started on 7 Jan, 2019 and ended on 14 Jan, 2019. This bullish trend delivered +6.09% to investors.

On monthly basis, RADICO delivered profits in more months over the last year, than losses. RADICO delivered profits in more months than NIFTY-50 index. RADICO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -29.67% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RADICO and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both RADICO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Frugality includes all the other virtues.
-- Cicero

RADICO 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 RADICO's volatility from 19 Oct, 2018 to 17 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 RADICO has significant negative skewness in it's return distribution. This indicates that RADICO is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in RADICO), three instruments that deserve special mention are MERCK, NIITTECH and HATSUN. They have all outperformed the market and must be closely watched for investment opportunities.

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