STAR PAPER MILLS LTD

143.55 -3.51 (-2.45%) Sell

Stop-loss on the minds of STARPAPER investors as it significantly underperforms

14 min read

STAR PAPER MILLS LTD was among the worst performers on Tuesday. It lost -2.45% to close at 143.55. On a day when the overall market breadth was 70%, it closed higher than 96% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Themes containing STARPAPER]

Buy-and-Hold investors in STARPAPER experienced a maximum drawdown of -23.64% over the last three months. It lost -9.6% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.

Trend

STARPAPER has been underperforming the NIFTY-50 index in recent time, after having outperformed till 15 Jan, 2018. Over the last 3 years and 1 month, STARPAPER outperformed the NIFTY-50 index on 46% days. Which indicates that on days STARPAPER outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

STARPAPER returned losses on 64% days in the last three months. During this time, it delivered on average -0.12% per day. It delivered it's best daily return of +11.32%, during this period, on Friday, 30 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +13.41% to investors. This was followed by a bearish trend that started on 13 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -18.0% of investor capital.

STARPAPER had 3 profitable and 9 loss making months over the last year. During the last year, STARPAPER underperformed NIFTY-50 index on monthly return basis. STARPAPER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -18.74% compared to -6.42% returned by NIFTY-50 index in Sep 2018. STARPAPER had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered -16.44%. It is interesting to note that both STARPAPER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
-- Charles Dickens

STARPAPER 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 STARPAPER's volatility from 30 Nov, 2018 to 17 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 STARPAPER has significant negative skewness in it's return distribution. This indicates that STARPAPER is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in STARPAPER you may find it interesting to know that VINATIORGA, RESPONIND and NIITTECH have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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