UNITED BANK OF INDIA delivered massive losses on Friday. It fell by -2.43% to close at 12.05. On a day when the overall market breadth was 71%, it closed higher than 14% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
UNITEDBNK showed a strong bullish trend over the last 3 months. During this period UNITEDBNK surged by +22.34% and saw a maximum drawdown of -18.37%. There were 3 long signals during this period that returned a cumulative of +6.63% to investors.
UNITEDBNK has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 7 Feb, 2017 to 28 Aug, 2018. Over the last 3 years and 1 month, UNITEDBNK underperformed the NIFTY-50 index on 55% days.
UNITEDBNK returned losses on 59% days in the last three months. During this time, it delivered on average +0.36% per day. It delivered it's best daily return of +10.82%, during this period, on Wednesday, 16 Jan, 2019. The longest stort-term trend during this period was 7 profitable days, which started on 2 Nov, 2018 and went on till 13 Nov, 2018. This bullish trend returned +10.93% to investors.
During the last year UNITEDBNK had 5 profitable months and 7 loss making months. Profitable number of months of UNITEDBNK and NIFTY-50 index were the same. UNITEDBNK significantly outperformed NIFTY-50 index in Dec 2018, when it returned +16.98% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. UNITEDBNK and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both UNITEDBNK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
My old father used to have a saying: If you make a bad bargain, hug it all the tighter.
-- Abraham Lincoln
UNITEDBNK 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 surge in UNITEDBNK's volatility from 25 Oct, 2018 to 13 Nov, 2018. 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 UNITEDBNK has significant negative skewness in it's return distribution. This indicates that UNITEDBNK is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than UNITEDBNK. Therefore, NIFTY-50 must receive a lower allocation than UNITEDBNK in your portfolio. NIFTY-50 index usually has shorter drawdown period than UNITEDBNK.
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