Electrical THEME

1937.84 -13.39 (-0.69%) Sell

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Stop-loss on the minds of ELECTRICAL THEME investors as it underperforms broader market

14 min read

~ELECTRICAL trailed the broader market today. On a longer term basis, investors in Electrical made +0.14% per day. Wednesday's performance of -0.69% was a underperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~ELECTRICAL experienced a maximum drawdown of -15.85% over the last three months. It fell by -3.89% during this 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 +4.09%.


~ELECTRICAL has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 19 Jul, 2018 to 9 Nov, 2018. Over the last 3 years and 1 month, ~ELECTRICAL outperformed the NIFTY-50 index on 49% days. Which indicates that on days ~ELECTRICAL outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months ~ELECTRICAL was mostly loss making and delivered on average -0.05% per day. It's best return during this period (of +6.39%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -2.69%) was on Tuesday, 15 Jan, 2019. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +14.33%) started on 29 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -4.09%) started on 17 Jan, 2019 and went on till 23 Jan, 2019.

During the last year ~ELECTRICAL had 7 profitable months and 5 loss making months. ~ELECTRICAL returned profits in more months than NIFTY-50 index. ~ELECTRICAL significantly outperformed NIFTY-50 index in Sep 2018, when it returned +65.1% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ~ELECTRICAL had a longer winning streak of profitable months than NIFTY-50 index. It went up in 5 straight months (from Jul 2018 to Nov 2018) during which period it delivered +91.5%. It is interesting to note that both ~ELECTRICAL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It is not the man who has too little, but the man who craves more, that is poor.
-- Seneca

~ELECTRICAL is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in ~ELECTRICAL's volatility from 24 Oct, 2018 to 2 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 ~ELECTRICAL has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

Based on your interest in ~ELECTRICAL you may find it interesting to know that LTTS, KARURVYSYA and BATAINDIA are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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