Commodities THEME

2233.67 +128.14 (+5.74%) Buy

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COMMODITIES THEME investors looking to add more to current positions

13 min read

Commodities ranked better than it's peers on Friday. It delivered +5.74% to close at 2233.67. It is currently trading -54% below it's 52 week high of 4932.12.

[Theme constituents]

Buy-and-Hold investors in ~COMMODITIES experienced a maximum drawdown of -17.12% over the last three months. It delivered +18.46% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


~COMMODITIES has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 8 Jan, 2018 to 1 Jan, 2019. Over the last 3 years and 1 month, ~COMMODITIES underperformed the NIFTY-50 index on 57% days.

During the last three months ~COMMODITIES delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +9.24%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -5.35%) was on Tuesday, 27 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 12 Nov, 2018 and ended on 22 Nov, 2018. This bearish trend lost -11.88% of investor capital.

During the last year ~COMMODITIES had 4 profitable months and 8 loss making months. ~COMMODITIES returned profits in fewer months than NIFTY-50 index. ~COMMODITIES was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -31.63% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~COMMODITIES had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -32.25%. It is interesting to note that both ~COMMODITIES and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.
-- Warren Edward Buffett

~COMMODITIES 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 ~COMMODITIES's volatility from 22 Oct, 2018 to 28 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 ~COMMODITIES has significant negative skewness in it's return distribution. This indicates that ~COMMODITIES is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ~COMMODITIES you may find it interesting to know that LTI and SPLIL have both shown remarkable performance this year and deserve to be on every investors' watchlist.

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