RAIN INDUSTRIES LIMITED

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.

Trend

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.

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