ZODIAC CLOTHING CO. LTD.

136.95 -1.09 (-0.8%) Sell

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

13 min read

ZODIAC CLOTHING CO. LTD. underperformed on Tuesday. It returned -0.8% to close at 136.95. On a day when the overall market breadth was 70%, it closed higher than 19% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

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ZODIACLOTH showed a flat trend over the last 3 months. During this period ZODIACLOTH returned -0.15% and saw a maximum drawdown of -9.93%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ZODIACLOTH till volatility reduces and a clear trend emerges.

Trend

ZODIACLOTH has been underperforming the NIFTY-50 index in recent time, after having outperformed till 8 Feb, 2016. Over the last 3 years and 1 month, ZODIACLOTH underperformed the NIFTY-50 index on 53% days.

During the last three months ZODIACLOTH delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.38%) was on Thursday, 13 Dec, 2018. While it's worst loss in the same period (of -5.2%) was on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 19 Nov, 2018 and went on till 26 Nov, 2018. The bullish trend returned +5.38% to investors. This was followed by a bearish trend that started on 3 Jan, 2019 and ended on 8 Jan, 2019. This bearish trend lost -4.4% of investor capital.

On monthly basis, ZODIACLOTH delivered losses in more months over the last year, than profits. ZODIACLOTH delivered profits less regularly than NIFTY-50 index. ZODIACLOTH was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -14.31% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ZODIACLOTH and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ZODIACLOTH and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Well, I think that there's a very thin dividing line between success and failure. And I think if you start a business without financial backing, you're likely to go the wrong side of that dividing line.

ZODIACLOTH 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 ZODIACLOTH's volatility from 19 Dec, 2018 to 22 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 ZODIACLOTH has significant negative skewness in it's return distribution. This indicates that ZODIACLOTH is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ZODIACLOTH you may find it interesting to know that VINATIORGA, NIITTECH and RESPONIND are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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