20.5 -0.05 (-0.24%) Buy

Don't consider investing in UCOBANK now, it is risky at the moment

13 min read

UCO BANK underperformed broader market today. It returned -0.24% to close at 20.5. It's recent 5 day performance has been -0.24%, +0.24%, -0.24%, -1.2% and +0.24%.

[Themes containing UCOBANK]

UCOBANK showed a strong up trend over the last 3 months. During this period UCOBANK returned +22.75% and saw a maximum drawdown of -18.1%. There were 2 long signals during this period that returned a cumulative of +4.91% to investors.


UCOBANK has been underperforming the NIFTY-50 index in recent time, after having outperformed till 6 Jan, 2016. Over the last 3 years and 1 month, UCOBANK underperformed the NIFTY-50 index on 55% days.

During the last three months UCOBANK delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +13.86%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -4.52%) was on Thursday, 3 Jan, 2019. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 31 Oct, 2018. The bullish trend returned +15.34% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -10.88% of investor capital.

On monthly basis, UCOBANK delivered losses in more months over the last year, than profits. UCOBANK delivered profits less regularly than NIFTY-50 index. UCOBANK was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -19.42% compared to -6.42% returned by NIFTY-50 index in Sep 2018. UCOBANK had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -50.53%. It is interesting to note that both UCOBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

My expertise was in public finance, particularly corporate taxation, since I had worked at the US Treasury.
-- Merton Miller

UCOBANK 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 UCOBANK's volatility from 5 Nov, 2018 to 18 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 UCOBANK has significant negative skewness in it's return distribution. This indicates that UCOBANK is very risky for short-term investment and can significantly underperform for long durations.

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

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

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