SHRIRAM EPC LTD. significantly underperformed on Friday. It lost -3.18% to close at 10.65. It is currently trading -67% below it's 52 week high of 33.25.
SHRIRAMEPC showed a down trend over the last 3 months. During this period SHRIRAMEPC lost -4.91% and saw a maximum drawdown of -18.7%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SHRIRAMEPC till volatility reduces and a clear trend emerges.
SHRIRAMEPC has been underperforming the NIFTY-50 index in recent time, after having outperformed till 7 Nov, 2016. Over the last 3 years and 1 month, SHRIRAMEPC underperformed the NIFTY-50 index on 59% days.
SHRIRAMEPC returned losses on 67% days in the last three months. During this time, it delivered on average -0.04% per day. It delivered it's best daily return of +12.93%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 7 Nov, 2018. The bullish trend returned +11.45% to investors. This was followed by a bearish trend that started on 5 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -14.04% of investor capital.
SHRIRAMEPC had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of SHRIRAMEPC and NIFTY-50 index were the same. SHRIRAMEPC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -32.8% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SHRIRAMEPC had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Mar 2018 to Jun 2018) during which period it delivered -68.3%. It is interesting to note that both SHRIRAMEPC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.
-- Edmund Burke
SHRIRAMEPC 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 surge in SHRIRAMEPC's volatility from 22 Oct, 2018 to 24 Oct, 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 SHRIRAMEPC has significant negative skewness in it's return distribution. This indicates that SHRIRAMEPC is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than SHRIRAMEPC. Therefore, NIFTY-50 must receive a lower allocation than SHRIRAMEPC in your portfolio. NIFTY-50 index usually has shorter drawdown period than SHRIRAMEPC.
On a general note (since you are interested in SHRIRAMEPC), three instruments that deserve special mention are NIITTECH, LTI and RESPONIND. They have all outperformed the market and must be closely watched for investment opportunities.
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