Agriculture THEME

2140.87 +5.39 (+0.25%) Sell

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AGRICULTURE THEME investors looking to add more to current positions

14 min read

Agriculture managed to outperform the broader market on Friday. It surged by +0.25% to close at 2140.87. On a day when the overall market breadth was 71%, it closed higher than 69% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

Buy-and-Hold investors in ~AGRICULTURE experienced a maximum drawdown of -20.88% over the last three months. It fell by -15.13% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +15.11%.

Trend

~AGRICULTURE has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 18 Feb, 2016 to 15 Jan, 2018. Over the last 2 years 11 months and 13 days, ~AGRICULTURE outperformed the NIFTY-50 index on 53% days.

~AGRICULTURE returned losses on 57% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -4.5%, during this period, on Friday, 28 Sep, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 26 Oct, 2018 and went on till 5 Nov, 2018. This bullish trend returned +7.79% to investors.

During the last year ~AGRICULTURE had 4 profitable months and 8 loss making months. ~AGRICULTURE returned profits in fewer months than NIFTY-50 index. ~AGRICULTURE was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -15.07% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~AGRICULTURE had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -11.6%. It is interesting to note that both ~AGRICULTURE and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don't quit.
-- Conrad Hilton

~AGRICULTURE 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 ~AGRICULTURE's volatility from 28 Sep, 2018 to 4 Dec, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ~AGRICULTURE has significant positive skewness in it's return distribution. This indicates that investors can expect ~AGRICULTURE to recover from drawdowns quickly. Which makes ~AGRICULTURE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~AGRICULTURE you may find it interesting to know that MERCK, CUB and VMART have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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