TIRUMALCHM is a falling knife, continues to bleed every investor trying to catch it

THIRUMALAI CHEMICALS LTD has destroyed investor wealth today. It delivered -3.53% to close at 103.7. It's recent 5 day performance has been +1.37%, -1.03%, -1.38%, +0.37% and +1.69%.

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TIRUMALCHM showed a bearish trend over the last 3 months. During this period TIRUMALCHM delivered -5.51% and saw a maximum drawdown of -21.79%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TIRUMALCHM till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

TIRUMALCHM has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 2 Mar, 2016 to 9 Jan, 2018. Over the last 3 years and 1 month, TIRUMALCHM outperformed the NIFTY-50 index on 46% days. Which indicates that on days TIRUMALCHM 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 TIRUMALCHM was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +6.58%) was on Wednesday, 19 Dec, 2018. While it's worst loss in the same period (of -3.98%) was on Monday, 12 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +15.6%) started on 30 Oct, 2018 and went on till 5 Nov, 2018 while the bearish trend (which returned -9.86%) started on 14 Nov, 2018 and went on till 20 Nov, 2018.

The last 12 months saw TIRUMALCHM's investors making profits in 4 months and incurring losses in 8 months. TIRUMALCHM was less consistent in delivering monthly returs than NIFTY-50 index. TIRUMALCHM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -26.92% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TIRUMALCHM had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -38.98%. It is interesting to note that both TIRUMALCHM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros

TIRUMALCHM 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 TIRUMALCHM's volatility from 24 Oct, 2018 to 21 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 TIRUMALCHM has significant negative skewness in it's return distribution. This indicates that TIRUMALCHM is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in TIRUMALCHM), three instruments that deserve special mention are BAJFINANCE, BRITANNIA and NIFTY-GS-15YRPLUS. They have all outperformed the market and must be closely watched for investment opportunities.