962.9 -5.47 (-0.57%) Sell

TATAELXSI investors check their stop-losses as it underperforms

13 min read

TATAELXSI performed worse than the broader market today. On a longer term basis, investors in TATA ELXSI LIMITED made +0.15% per day. Friday's performance of -0.57% was a significant underperformance compared to it's daily average.

[Themes containing TATAELXSI]

Buy-and-Hold investors in TATAELXSI experienced a maximum drawdown of -10.5% over the last three months. It returned -2.01% during this down trending period. There were no long signals during this period, where the short signal generated profits of +2.01% for investors.


TATAELXSI has been underperforming the NIFTY-50 index in recent time, after having outperformed till 2 Feb, 2016. Over the last 3 years and 1 month, TATAELXSI underperformed the NIFTY-50 index on 53% days.

TATAELXSI was profitable on 50% days in the last three months. During this time, it delivered on average -0.02% per day. It delivered it's best daily return of +3.85%, during this period, on Thursday, 1 Nov, 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 +11.94% to investors. This was followed by a bearish trend that started on 4 Jan, 2019 and ended on 11 Jan, 2019. This bearish trend lost -6.75% of investor capital.

On monthly basis, TATAELXSI delivered losses in more months over the last year, than profits. TATAELXSI delivered profits less regularly than NIFTY-50 index. TATAELXSI significantly outperformed NIFTY-50 index in Apr 2018, when it returned +23.79% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TATAELXSI had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Sep 2018 to Jan 2019) during which period it delivered -37.45%. It is interesting to note that both TATAELXSI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Risk comes from not knowing what you're doing.
-- Warren Buffett

TATAELXSI 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 TATAELXSI's volatility from 22 Oct, 2018 to 3 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 TATAELXSI 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 TATAELXSI 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 TATAELXSI. Therefore, NIFTY-50 must receive a lower allocation than TATAELXSI in your portfolio. NIFTY-50 index usually has shorter drawdown period than TATAELXSI.

On a general note (since you are interested in TATAELXSI), two instruments that deserve special mention are ~CHEMICALS and BRITANNIA. They have significantly outperformed the overall market.

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