Profit booking on the minds of MURUGAPPAGRP THEME investors as it marginally outperforms

Murugappa Group is looking better than most other alternatives on Friday. It grew by +1.12% to close at 1906.33. On a day when the overall market breadth was 71%, it closed higher than 63% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

~MURUGAPPAGRP is currently in a down trend. The previous short signal in ~MURUGAPPAGRP has not been profitable for investors in general. If you are short on ~MURUGAPPAGRP at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~MURUGAPPAGRP has been underperforming the NIFTY-50 index in recent time, after having outperformed till 9 Jan, 2018. Over the last 2 years 11 months and 13 days, ~MURUGAPPAGRP outperformed the NIFTY-50 index on 50% days. Which indicates that on days ~MURUGAPPAGRP 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 ~MURUGAPPAGRP delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +6.09%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -4.17%) was on Friday, 5 Oct, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +7.64% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -7.1% of investor capital.

~MURUGAPPAGRP had 4 profitable and 8 loss making months over the last year. During the last year, ~MURUGAPPAGRP underperformed NIFTY-50 index on monthly return basis. ~MURUGAPPAGRP was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -10.86% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~MURUGAPPAGRP and NIFTY-50 index, both had periods of 2 consecutive losing months. It is interesting to note that both ~MURUGAPPAGRP and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"I finally know what distinguishes man from the other beasts: financial worries.

~MURUGAPPAGRP 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 ~MURUGAPPAGRP's volatility from 17 Sep, 2018 to 22 Nov, 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 ~MURUGAPPAGRP 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.

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

On a general note (since you are interested in ~MURUGAPPAGRP), two instruments that deserve special mention are BRITANNIA and ~CHEMICALS. They have significantly outperformed the overall market.