Want to invest in SREINFRA? Consider as it is looking better than most other alternatives

SREI INFRASTRUCTURE FINAN is looking better than most other alternatives on Friday. It grew by +0.15% to close at 33.5. It is currently trading -68% below it's 52 week high of 106.0.

[Themes containing SREINFRA]

SREINFRA showed a strong up trend over the last 3 months. During this period SREINFRA grew by +21.38% and saw a maximum drawdown of -25.25%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SREINFRA till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

SREINFRA has been underperforming the NIFTY-50 index in recent time, after having outperformed till 21 Jul, 2017. Over the last 3 years and 1 month, SREINFRA underperformed the NIFTY-50 index on 55% days.

During the last three months SREINFRA was mostly profitable and delivered on average +0.36% per day. It's best return during this period (of +9.29%) was on Friday, 9 Nov, 2018. While it's worst loss in the same period (of -5.71%) was on Monday, 12 Nov, 2018. There was initially a bearish trend during this period which started on 12 Nov, 2018 and went on till 15 Nov, 2018. The trend delivered -12.45% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 20 Dec, 2018. This bullish trend delivered +21.49% to investors.

On monthly basis, SREINFRA delivered losses in more months over the last year, than profits. SREINFRA delivered profits less regularly than NIFTY-50 index. SREINFRA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -41.24% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SREINFRA had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -37.08%. It is interesting to note that both SREINFRA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The stock market is a discounter of all known information.
-- Kenneth Fisher

SREINFRA 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 SREINFRA's volatility from 19 Oct, 2018 to 1 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 SREINFRA has significant negative skewness in it's return distribution. This indicates that SREINFRA is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in SREINFRA 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 SREINFRA. Therefore, NIFTY-50 must receive a lower allocation than SREINFRA in your portfolio. NIFTY-50 index usually has shorter drawdown period than SREINFRA.

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