Stop-loss on the minds of SOUTHBANK investors as it underperforms

THE SOUTH INDIAN BANK LTD ranked worse than it's peers on Friday. It lost -0.96% to close at 15.55. On a day when the overall market breadth was 71%, it closed higher than 21% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing SOUTHBANK]

SOUTHBANK is currently in a up trend. Over the last three months Buy-and-Hold has been a better strategy (returning +5.78%) for SOUTHBANK's investors than trading long signals.

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Monthly Performance

Alpha (outperformance)

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Return distribution

SOUTHBANK has been underperforming the NIFTY-50 index in recent time, after having outperformed till 8 Jan, 2018. Over the last 3 years and 1 month, SOUTHBANK underperformed the NIFTY-50 index on 52% days.

During the last three months SOUTHBANK delivered losses on 61% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.26%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -6.5%) was on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +10.53% to investors. This was followed by a bearish trend that started on 14 Nov, 2018 and ended on 16 Nov, 2018. This bearish trend lost -3.69% of investor capital.

SOUTHBANK had 3 profitable and 9 loss making months over the last year. During the last year, SOUTHBANK underperformed NIFTY-50 index on monthly return basis. SOUTHBANK was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -25.07% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SOUTHBANK had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -59.84%. It is interesting to note that both SOUTHBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

SOUTHBANK 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 SOUTHBANK's volatility from 22 Oct, 2018 to 8 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 SOUTHBANK has positive skewness in it's return distribution. This indicates that investors can expect SOUTHBANK to make attempts to recover from drawdowns quickly. Which makes SOUTHBANK a good candidate for momentum based trading on short-term bullish trends or counter-trends.

Investors trading in SOUTHBANK derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in SOUTHBANK), three small cap instruments that deserve special mention are NIITTECH, VINATIORGA and IGARASHI. They have all outperformed the market and must be closely watched for investment opportunities.