950.0 +13.59 (+1.43%) Buy

Time to party for SOTL investors as it outperforms broader market

13 min read

SAVITA OIL TECHNOLO. LTD delivered good returns today. It grew by +1.43% to close at 950.0. During the last week it lost -6.36% and saw a maximum drawdown of -7.68% before bouncing back.

[Themes containing SOTL]

SOTL is currently in a up trend. Over the last three months Buy-and-Hold has been a better strategy (returning -5.51%) for SOTL's investors than trading long signals.


SOTL has been underperforming the NIFTY-50 index in recent time, after having outperformed till 3 Jan, 2018. Over the last 3 years and 1 month, SOTL outperformed the NIFTY-50 index on 48% days. Which indicates that on days SOTL outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months SOTL was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +6.21%) was on Thursday, 27 Dec, 2018. While it's worst loss in the same period (of -5.22%) was on Friday, 18 Jan, 2019. There was initially a bullish trend during this period which started on 19 Dec, 2018 and went on till 28 Dec, 2018. The bullish trend returned +25.33% to investors. This was followed by a bearish trend that started on 31 Dec, 2018 and ended on 14 Jan, 2019. This bearish trend lost -13.62% of investor capital.

SOTL had 6 profitable and 6 loss making months over the last year. SOTL was profitable in more months than NIFTY-50 index. SOTL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -19.5% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SOTL and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both SOTL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Financial crises are like fireworks: they illuminate the sky even as they go pop.

SOTL 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 SOTL's volatility from 24 Oct, 2018 to 14 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 SOTL has significant negative skewness in it's return distribution. This indicates that SOTL is very risky for short-term investment and can significantly underperform for long durations.

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

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

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