6.95 -0.33 (-4.79%) Sell

Doubt in the minds of ROLTA investors as it significantly underperforms

13 min read

ROLTA INDIA LTD was among the worst performers on Wednesday. It fell by -4.79% to close at 6.95. On a day when the overall market breadth was 70%, it closed higher than 9% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.

[Themes containing ROLTA]

ROLTA is currently in a bearish trend. The current bearish signal has generated a profit of +50.0% for investors in the last three months.


ROLTA has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 6 Jan, 2016 to 21 Jan, 2019. Over the last 3 years and 1 month, ROLTA underperformed the NIFTY-50 index on 57% days.

During the last three months ROLTA was mostly loss making and delivered on average -1.35% per day. It's best return during this period (of +4.93%) was on Friday, 9 Nov, 2018. While it's worst loss in the same period (of -4.98%) was on Tuesday, 11 Dec, 2018. The longest stort-term trend during this period was 15 losing days, which started on 4 Dec, 2018 and ended on 24 Dec, 2018. This bearish trend lost -44.39% of investor capital.

During the last year ROLTA had 4 profitable months and 8 loss making months. Profitable number of months of ROLTA and NIFTY-50 index were the same. ROLTA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -60.5% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ROLTA had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered -63.41%. It is interesting to note that both ROLTA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Investors must keep in mind that there's a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .

ROLTA is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in ROLTA's volatility from 25 Oct, 2018 to 22 Nov, 2018. 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 ROLTA has significant negative skewness in it's return distribution. This indicates that ROLTA is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ROLTA you may find it interesting to know that BAJFINANCE, HINDUNILVR and TORNTPHARM are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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