CONSTRUCTION THEME shows sign of weakness as investors do cost averaging

Construction performed better than the broader market on Friday. It returned +0.63% to close at 697.611. It is currently trading -49% below it's 52 week high of 1385.32.

[Theme constituents]

~CONSTRUCTION showed a strong down trend over the last 3 months. During this period ~CONSTRUCTION returned -28.98% and saw a maximum drawdown of -33.1%. There were 2 short signals during this period that returned a cumulative of +25.59% to investors.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~CONSTRUCTION has been underperforming the NIFTY-50 index in recent time, after having outperformed till 11 Apr, 2018. Over the last 2 years 11 months and 13 days, ~CONSTRUCTION underperformed the NIFTY-50 index on 50% days. Which indicates that on days ~CONSTRUCTION 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 ~CONSTRUCTION was mostly loss making and delivered on average -0.54% per day. It's best return during this period (of +3.96%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -6.01%) was on Tuesday, 11 Dec, 2018. There was initially a bearish trend during this period which started on 27 Sep, 2018 and went on till 8 Oct, 2018. The trend delivered -23.54% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 9 Nov, 2018. This bullish trend delivered +13.76% to investors.

On monthly basis, ~CONSTRUCTION delivered losses in more months over the last year, than profits. ~CONSTRUCTION delivered profits less regularly than NIFTY-50 index. ~CONSTRUCTION was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -24.53% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~CONSTRUCTION had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -28.92%. It is interesting to note that both ~CONSTRUCTION and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages.
-- Henry Ford

~CONSTRUCTION is becoming more 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 ~CONSTRUCTION's volatility from 10 Oct, 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 ~CONSTRUCTION has significant positive skewness in it's return distribution. This indicates that investors can expect ~CONSTRUCTION to recover from drawdowns quickly. Which makes ~CONSTRUCTION a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~CONSTRUCTION), CUB has performed really well this year and deserves to be closely tracked for investment opportunities.