Don't even consider investing in SUNTV now, it is a really dangerous investment now
18 Jan, 201913 min read
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SUN TV NETWORK LIMITED was among the worst performers on Friday. It fell by -7.04% to close at 525.2. On a day when the overall market breadth was 71%, it closed higher than 53% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
SUNTV showed a strong bearish trend over the last 3 months. During this period SUNTV fell by -18.05% and saw a maximum drawdown of -21.88%. There was a short signal during this period which returned +18.05%.
SUNTV has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 8 Jun, 2016 to 16 Jan, 2018. Over the last 3 years and 1 month, SUNTV underperformed the NIFTY-50 index on 51% days.
During the last three months SUNTV was mostly loss making and delivered on average -0.29% per day. It's best return during this period (of +4.96%) was on Friday, 28 Dec, 2018. While it's worst loss in the same period (of -7.04%) was on Friday, 18 Jan, 2019. The longest stort-term trend during this period was 4 losing days, which started on 20 Dec, 2018 and ended on 26 Dec, 2018. This bearish trend lost -3.66% of investor capital.
During the last year SUNTV had 3 profitable months and 9 loss making months. SUNTV returned profits in fewer months than NIFTY-50 index. SUNTV was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -19.83% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SUNTV had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Jun 2018 to Nov 2018) during which period it delivered -45.58%. It is interesting to note that both SUNTV and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Buy at the point of maximum pessimism; sell at the point of maximum optimism.
-- Sir John Templeton
SUNTV is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in SUNTV's volatility from 19 Oct, 2018 to 11 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 SUNTV has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
Investors trading in SUNTV derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than SUNTV. Therefore, NIFTY-50 must receive a lower allocation than SUNTV in your portfolio. NIFTY-50 index usually has shorter drawdown period than SUNTV.
Based on your interest in SUNTV you may find it interesting to know that IEX is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to IEX or sufficiently diversifying your portfolio.
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