1271.75 -17.85 (-1.4%) Sell

Search for alternative investments is on for SFL investors as it underperforms broader market

13 min read

SHEELA FOAM LIMITED ranked worse than it's peers on Tuesday. It fell by -1.4% to close at 1271.75 which is it's 52 week low, down -27% from it's 52 week high.

[Themes containing SFL]

SFL is currently in a bearish trend. The current bearish signal has generated a profit of +15.45% for investors in the last three months.


SFL has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 25 Jan, 2017 to 30 Nov, 2017. Over the last 2 years 1 month and 13 day, SFL underperformed the NIFTY-50 index on 52% days.

During the last three months SFL was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +3.48%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.22%) was on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 9 Jan, 2019 and ended on 17 Jan, 2019. This bearish trend lost -7.75% of investor capital.

During the last year SFL had 5 profitable months and 7 loss making months. Profitable number of months of SFL and NIFTY-50 index were the same. SFL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jan 2019, returned -13.89% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SFL had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered +17.48%.

"The road to economic well-being is to reward productive economic activity and to provide a moderate and predictable growth of money to finance real economic growth without reigniting the fires of inflation.

SFL 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 SFL's volatility from 25 Oct, 2018 to 2 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 SFL has significant negative skewness in it's return distribution. This indicates that SFL is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in SFL), two instruments that deserve special mention are IGARASHI and HATSUN. They have significantly outperformed the overall market this year.

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