Don't lose faith in CLOTHING THEME now, it delivered good returns

Clothing showed marginal outperformance on Friday. It delivered -0.36% to close at 769.037. On a day when the overall market breadth was 71%, it closed higher than 24% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

~CLOTHING showed a strong bearish trend over the last 3 months. During this period ~CLOTHING delivered -18.88% and saw a maximum drawdown of -21.94%. There were 2 short signals during this period that returned a cumulative of +6.43% to investors.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~CLOTHING has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 10 Jan, 2018 to 3 Dec, 2018. Over the last 2 years 11 months and 13 days, ~CLOTHING underperformed the NIFTY-50 index on 50% days. Which indicates that on days ~CLOTHING underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

During the last three months ~CLOTHING was mostly loss making and delivered on average -0.33% per day. It's best return during this period (of +4.72%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -8.88%) was on Wednesday, 28 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 28 Nov, 2018 and ended on 10 Dec, 2018. This bearish trend lost -13.93% of investor capital.

The last 12 months saw ~CLOTHING's investors making profits in 3 months and incurring losses in 9 months. ~CLOTHING was less consistent in delivering monthly returs than NIFTY-50 index. ~CLOTHING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -15.3% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~CLOTHING 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 -23.45%. It is interesting to note that both ~CLOTHING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

To beat the market you'll have to invest serious bucks to dig up information no one else has yet.
-- Merton Miller

~CLOTHING 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 ~CLOTHING's volatility from 17 Sep, 2018 to 28 Sep, 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 ~CLOTHING has significant positive skewness in it's return distribution. This indicates that investors can expect ~CLOTHING to recover from drawdowns quickly. Which makes ~CLOTHING a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~CLOTHING you may find it interesting to know that HEG has shown remarkable performance this year and deserves to be on every investors' watchlist.