Are you evaluating investing in RCF? Wait as it delivered lacklustre performance
18 Jan, 201913 min read
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RASHTRIYA CHEMICALS & FER delivered lacklustre performance today. It lost -0.62% to close at 64.5. It's recent 5 day performance has been -1.14%, -2.09%, +3.79%, -1.6% and -1.8%.
RCF showed a up trend over the last 3 months. During this period RCF returned +8.22% and saw a maximum drawdown of -8.19%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RCF till volatility reduces and a clear trend emerges.
RCF has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, RCF underperformed the NIFTY-50 index on 54% days.
During the last three months RCF delivered losses on 51% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.62%) was on Thursday, 10 Jan, 2019. While it's worst loss in the same period (of -3.45%) was on Monday, 24 Dec, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +8.15% to investors. This was followed by a bearish trend that started on 13 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -7.13% of investor capital.
RCF had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of RCF and NIFTY-50 index were the same. RCF was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -15.49% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RCF and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both RCF and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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RCF 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 RCF's volatility from 20 Dec, 2018 to 9 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 RCF has significant negative skewness in it's return distribution. This indicates that RCF is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than RCF. Therefore, NIFTY-50 must receive a lower allocation than RCF in your portfolio. NIFTY-50 index usually has shorter drawdown period than RCF.
On a general note (since you are interested in RCF), BAJFINANCE is a large cap that deserves to be closely tracked for investment opportunities.
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