Oil Drilling THEME

875.704 -6.89 (-0.79%) Sell

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OILDRILLING THEME investors re-evaluating their investment strategy

14 min read

Oil Drilling underperformed broader market on Friday. It delivered -0.79% to close at 875.704. On a day when the overall market breadth was 71%, it closed higher than 28% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Theme constituents]

Buy-and-Hold investors in ~OILDRILLING experienced a maximum drawdown of -15.1% over the last three months. It delivered -5.86% 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.


~OILDRILLING has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 12 Dec, 2016 to 7 Dec, 2018. Over the last 3 years and 1 month, ~OILDRILLING underperformed the NIFTY-50 index on 53% days.

During the last three months ~OILDRILLING was mostly loss making and delivered on average -0.09% per day. It's best return during this period (of +3.07%) was on Tuesday, 11 Dec, 2018. While it's worst loss in the same period (of -2.6%) was on Wednesday, 14 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 29 Oct, 2018 and went on till 7 Nov, 2018. This bullish trend returned +7.45% to investors.

The last 12 months saw ~OILDRILLING's investors making profits in 4 months and incurring losses in 8 months. ~OILDRILLING was less consistent in delivering monthly returs than NIFTY-50 index. ~OILDRILLING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -12.82% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~OILDRILLING had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -22.05%. It is interesting to note that both ~OILDRILLING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"There is no one-decision stocks

~OILDRILLING 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 ~OILDRILLING's volatility from 12 Dec, 2018 to 17 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 ~OILDRILLING has significant negative skewness in it's return distribution. This indicates that ~OILDRILLING is very risky for short-term investment and can significantly underperform for long durations.

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

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

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