Power THEME

817.715 +4.46 (+0.55%) Sell

Optimize theme

POWER THEME shows sign of weakness as investors do cost averaging

15 min read

Power ranked better than it's peers on Friday. It delivered +0.55% to close at 817.715. On a day when the overall market breadth was 71%, it closed higher than 26% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

~POWER showed a strong bearish trend over the last 3 months. During this period ~POWER delivered -27.66% and saw a maximum drawdown of -34.66%. There were 2 short signals during this period that returned a cumulative of +30.18% to investors.

Trend

~POWER has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 8 Jan, 2018 to 12 Oct, 2018. Over the last 2 years 11 months and 13 days, ~POWER underperformed the NIFTY-50 index on 48% days. Which indicates that on days ~POWER underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

During the last three months ~POWER was mostly loss making and delivered on average -0.46% per day. It's best return during this period (of +6.52%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -24.47%) was on Friday, 12 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +9.83%) started on 29 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -11.92%) started on 18 Sep, 2018 and went on till 25 Sep, 2018.

The last 12 months saw ~POWER's investors making profits in 4 months and incurring losses in 8 months. ~POWER was less consistent in delivering monthly returs than NIFTY-50 index. ~POWER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Oct 2018, returned -21.12% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~POWER had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -24.11%. It is interesting to note that both ~POWER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

There's more honor in investment management than in investment banking.
-- Charlie Munger

~POWER is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ~POWER's volatility from 12 Oct, 2018 to 26 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 ~POWER has significant positive skewness in it's return distribution. This indicates that investors can expect ~POWER to recover from drawdowns quickly. Which makes ~POWER a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~POWER you may find it interesting to know that ~COURIERSERVICES and ~MKTCAP351TO400 have both performed similar to ~POWER and can be considered by investors as alternative investment options.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter