120.1 +0.1 (+0.08%) Sell

Don't lose faith in RAIN now, it delivered good returns

13 min read

RAIN INDUSTRIES LIMITED showed marginal outperformance on Tuesday. It increased by +0.08% to close at 120.1. It is currently trading -72% below it's 52 week high of 439.3.

[Themes containing RAIN]

RAIN showed a strong bearish trend over the last 3 months. During this period RAIN fell by -28.43% and saw a maximum drawdown of -39.61%. There were 2 short signals during this period that returned a cumulative of +24.34% to investors.


RAIN has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 3 Jun, 2016 to 8 Jan, 2018. Over the last 3 years and 1 month, RAIN outperformed the NIFTY-50 index on 48% days. Which indicates that on days RAIN 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 RAIN was mostly loss making and delivered on average -0.48% per day. It's best return during this period (of +8.74%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -8.75%) was on Friday, 16 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 9 Nov, 2018 and ended on 16 Nov, 2018. This bearish trend lost -20.83% of investor capital.

During the last year RAIN had 3 profitable months and 9 loss making months. RAIN returned profits in fewer months than NIFTY-50 index. RAIN was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Nov 2018, returned -27.36% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RAIN had a longer winning streak of losing months than NIFTY-50 index. It went down in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered -83.15%. It is interesting to note that both RAIN and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury.
-- Merton Miller

RAIN is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in RAIN's volatility from 19 Nov, 2018 to 15 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 RAIN has significant negative skewness in it's return distribution. This indicates that RAIN is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in RAIN), two large cap instruments that deserve special mention are BAJFINANCE and HINDUNILVR. They have significantly outperformed the overall market.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... 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
Share with friends   WhatsApp   Facebook   Twitter