SHIPPING CORP OF INDIA LT

44.6 -0.54 (-1.22%) Buy

SCI investors check their stop-losses as it underperforms

13 min read

SCI performed worse than the broader market today. On a longer term basis, investors in SHIPPING CORP OF INDIA LT made +0.01% per day. Friday's performance of -1.22% was a significant underperformance compared to it's daily average.

[Themes containing SCI]

Buy-and-Hold investors in SCI experienced a maximum drawdown of -12.83% over the last three months. It gained +9.18% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

SCI has been underperforming the NIFTY-50 index in recent time, after having outperformed till 11 Jan, 2016. Over the last 3 years and 1 month, SCI underperformed the NIFTY-50 index on 57% days.

SCI returned losses on 59% days in the last three months. During this time, it delivered on average +0.16% per day. It delivered it's best daily return of +6.68%, during this period, on Friday, 21 Dec, 2018. There was initially a bullish trend during this period which started on 19 Oct, 2018 and went on till 23 Oct, 2018. The bullish trend returned +1.71% to investors. This was followed by a bearish trend that started on 19 Nov, 2018 and ended on 26 Nov, 2018. This bearish trend lost -3.23% of investor capital.

SCI had 4 profitable and 8 loss making months over the last year. During the last year, SCI underperformed NIFTY-50 index on monthly return basis. SCI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -23.28% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SCI and NIFTY-50 index, both had periods of 2 consecutive losing months. It is interesting to note that both SCI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Don't always trust what you see. In a bull market even a duck looks like a swan.
-- Vijay Kedia

SCI 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 SCI's volatility from 25 Oct, 2018 to 7 Dec, 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 SCI has significant negative skewness in it's return distribution. This indicates that SCI is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in SCI), three instruments that are extremely volatile are TIDEWATER, HATSUN and NIFTY50-DIV-POINT. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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