Engines THEME

1330.6 -23.48 (-1.76%) Sell

Optimize theme

ENGINES THEME investors check their stop-losses as it underperforms

13 min read

Engines delivered lacklustre performance today. It returned -1.76% to close at 1330.6. During the last week it returned -2.21% and saw a maximum drawdown of -3.27% before bouncing back.

[Theme constituents]

~ENGINES is currently in a down trend. Over the last three months Buy-and-Hold has been a better strategy (returning +3.62%) for ~ENGINES's investors than shorting it.


~ENGINES has been underperforming the NIFTY-50 index in recent time, after having outperformed till 9 May, 2017. Over the last 3 years and 1 month, ~ENGINES underperformed the NIFTY-50 index on 49% days. Which indicates that on days ~ENGINES underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

~ENGINES returned losses on 51% days in the last three months. During this time, it delivered on average +0.06% per day. It delivered it's best daily return of +3.09%, during this period, on Wednesday, 31 Oct, 2018. There was initially a bearish trend during this period which started on 16 Nov, 2018 and went on till 26 Nov, 2018. The trend delivered -4.34% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 17 Dec, 2018. This bullish trend delivered +5.05% to investors.

On monthly basis, ~ENGINES delivered profits and losses in equal number of months. ~ENGINES delivered profits in more months than NIFTY-50 index. ~ENGINES was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -17.52% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~ENGINES had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +2.25%. It is interesting to note that both ~ENGINES and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"I grew up in Finance.

~ENGINES 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 ~ENGINES's volatility from 23 Oct, 2018 to 14 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 ~ENGINES has significant negative skewness in it's return distribution. This indicates that ~ENGINES is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ~ENGINES you may find it interesting to know that IEX, TIDEWATER and IGARASHI are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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