586.2 -5.15 (-0.88%) Sell

TATAMETALI investors take a moment to reassess their portfolio allocation

13 min read

TATA METALIKS LTD underperformed broader market on Tuesday. It delivered -0.88% to close at 586.2. It is currently trading -35% below it's 52 week high of 911.35.

[Themes containing TATAMETALI]

TATAMETALI is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for TATAMETALI's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +0.96%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to TATAMETALI.


TATAMETALI has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 12 Feb, 2016 to 10 Jan, 2018. Over the last 3 years and 1 month, TATAMETALI outperformed the NIFTY-50 index on 48% days. Which indicates that on days TATAMETALI outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months TATAMETALI delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +9.56%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -2.77%) was on Monday, 24 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 16 Nov, 2018 and ended on 27 Nov, 2018. This bearish trend lost -10.16% of investor capital.

The last 12 months saw TATAMETALI's investors making profits in 2 months and incurring losses in 10 months. TATAMETALI was less consistent in delivering monthly returs than NIFTY-50 index. TATAMETALI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -15.32% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TATAMETALI 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 -17.79%. It is interesting to note that both TATAMETALI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.
-- Charlie Munger

TATAMETALI is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in TATAMETALI's volatility from 24 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 TATAMETALI has significant negative skewness in it's return distribution. This indicates that TATAMETALI is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in TATAMETALI), LTTS is a mid cap that deserves to be closely tracked for investment opportunities.

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