RBLBANK continues its fall as more investors loose confidence

RBLBANK showed weakness today. On a longer term basis, investors in RBL BANK LIMITED made +0.13% per day. Friday's performance of -0.05% was a underperformance compared to it's daily average.

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RBLBANK showed a strong bullish trend over the last 3 months. During this period RBLBANK increased by +21.4% and saw a maximum drawdown of -5.48%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RBLBANK till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

RBLBANK has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 29 Sep, 2016 to 10 Apr, 2017. Over the last 2 years and 5 months, RBLBANK outperformed the NIFTY-50 index on 51% days.

During the last three months RBLBANK was mostly profitable and delivered on average +0.33% per day. It's best return during this period (of +6.1%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -5.48%) was on Wednesday, 28 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 24 Oct, 2018 and went on till 30 Oct, 2018. This bullish trend returned +12.7% to investors.

During the last year RBLBANK had 6 profitable months and 6 loss making months. RBLBANK returned profits in more months than NIFTY-50 index. RBLBANK was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.39% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RBLBANK had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered +20.97%. It is interesting to note that both RBLBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Let him who would enjoy a good future waste none of his present.
-- Roger Babson

RBLBANK 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 RBLBANK's volatility from 22 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 RBLBANK 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 RBLBANK derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in RBLBANK you may find it interesting to know that NIFTY50-DIV-POINT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to NIFTY50-DIV-POINT or sufficiently diversifying your portfolio.