STRIDES PHARMA SCI LTD

517.25 -10.91 (-2.11%) Buy

STAR investors doing a reality check

13 min read

STRIDES PHARMA SCI LTD was among the worst performers on Friday. It returned -2.11% to close at 517.25. On a day when the overall market breadth was 71%, it closed higher than 41% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing STAR]

STAR is currently in a up trend. The previous long signal in STAR has not been profitable for investors in general. If you are invested in STAR at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

STAR has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, STAR underperformed the NIFTY-50 index on 56% days.

During the last three months STAR delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +11.35%) was on Friday, 9 Nov, 2018. While it's worst loss in the same period (of -4.24%) was on Thursday, 6 Dec, 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 -4.04% losses to investors. This was followed by a bullish trend that started on 8 Jan, 2019 and ended on 14 Jan, 2019. This bullish trend delivered +13.88% to investors.

On monthly basis, STAR delivered losses in more months over the last year, than profits. STAR delivered profits less regularly than NIFTY-50 index. STAR was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -37.09% compared to -6.42% returned by NIFTY-50 index in Sep 2018. STAR had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Feb 2018 to Jul 2018) during which period it delivered -59.58%. It is interesting to note that both STAR and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Too many people spend money they earned..to buy things they don't want..to impress people that they don't like.
-- Will Rogers

STAR 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 STAR's volatility from 11 Dec, 2018 to 4 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 STAR has positive skewness in it's return distribution. This indicates that investors can expect STAR to make attempts to recover from drawdowns quickly. Which makes STAR a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in STAR), two large cap instruments that deserve special mention are TCS and BAJFINANCE. They have significantly outperformed the overall market.

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