Engineering THEME

715.208 -6.84 (-0.96%) Sell

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Search for alternative investments is on for ENGINEERING THEME investors as it underperforms broader market

15 min read

Engineering delivered lacklustre performance on Friday. It delivered -0.96% to close at 715.208. It is currently trading -33% below it's 52 week high of 1079.81.

[Theme constituents]

Buy-and-Hold investors in ~ENGINEERING experienced a maximum drawdown of -7.72% over the last three months. It increased by +8.42% during this bullish trending period. There were no long signals during this period. However, the short signal incurred a significant loss, losing -8.42% of investors' capital.

Trend

~ENGINEERING has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 22 May, 2017 to 1 Oct, 2018. Over the last 1 year and 8 months, ~ENGINEERING underperformed the NIFTY-50 index on 57% days.

During the last three months ~ENGINEERING was mostly profitable and delivered on average +0.14% per day. It's best return during this period (of +2.31%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -2.63%) was on Thursday, 25 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 11 Dec, 2018 and went on till 20 Dec, 2018. This bullish trend returned +9.22% to investors.

The last 12 months saw ~ENGINEERING's investors making profits in 6 months and incurring losses in 6 months. During the last year, ~ENGINEERING and NIFTY-50 index had the same number of profitable months. ~ENGINEERING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.09% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~ENGINEERING had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered +6.96%. It is interesting to note that both ~ENGINEERING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Money is not the only answer, but it makes a difference.
-- Barack Obama

~ENGINEERING 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 fall in ~ENGINEERING's volatility from 25 Oct, 2018 to 11 Jan, 2019. 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 ~ENGINEERING has significant negative skewness in it's return distribution. This indicates that ~ENGINEERING is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ~ENGINEERING you may find it interesting to know that COCHINSHIP, ~MKTCAP351TO400 and ~LOGISTICS have all performed similar to ~ENGINEERING and qualify as alternative investment candidates that must be evaluated for diversification.

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