Prayers for WELCORP investors as it significantly underperforms
18 Jan, 201913 min read
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WELSPUN CORP LIMITED ranked among the worst performers today. It delivered -3.35% to close at 119.9. During the last week it delivered -10.82% and saw a maximum drawdown of -10.82%.
WELCORP is currently in a bearish trend. The previous short signal in WELCORP has not been profitable for investors in general. If you are short on WELCORP at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
WELCORP has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 9 Nov, 2016 to 22 Jan, 2018. Over the last 3 years and 1 month, WELCORP underperformed the NIFTY-50 index on 51% days.
WELCORP returned losses on 59% days in the last three months. During this time, it delivered on average -0.1% per day. It delivered it's best daily return of +9.03%, during this period, on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 14 Jan, 2019 and ended on 18 Jan, 2019. This bearish trend lost -13.64% of investor capital.
The last 12 months saw WELCORP's investors making profits in 6 months and incurring losses in 6 months. During the last year, WELCORP delivered profits in more months than NIFTY-50 index. WELCORP significantly outperformed NIFTY-50 index in Aug 2018, when it returned +33.41% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. WELCORP and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both WELCORP and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
We make a living by what we get, but we make a life by what we give.
-- Winston Churchill
WELCORP 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 fall in WELCORP's volatility from 19 Oct, 2018 to 10 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 WELCORP has significant negative skewness in it's return distribution. This indicates that WELCORP is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than WELCORP. Therefore, NIFTY-50 must receive a lower allocation than WELCORP in your portfolio. NIFTY-50 index usually has shorter drawdown period than WELCORP.
Based on your interest in WELCORP you may find it interesting to know that BATAINDIA and HATSUN are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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