SHIPPING THEME shows sign of weakness as investors do cost averaging

Shipping showed marginal outperformance on Friday. It increased by +0.19% to close at 868.296. 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]

Buy-and-Hold investors in ~SHIPPING experienced a maximum drawdown of -16.32% over the last three months. It fell by -9.58% 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. The net profit from Short signals was +5.17%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~SHIPPING has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 12 Jan, 2018 to 1 Oct, 2018. Over the last 2 years 11 months and 13 days, ~SHIPPING underperformed the NIFTY-50 index on 53% days.

During the last three months ~SHIPPING was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +5.02%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -3.4%) was on Monday, 24 Sep, 2018. The longest stort-term trend during this period was 8 losing days, which started on 14 Nov, 2018 and ended on 26 Nov, 2018. This bearish trend lost -8.72% of investor capital.

During the last year ~SHIPPING had 4 profitable months and 8 loss making months. ~SHIPPING returned profits in fewer months than NIFTY-50 index. ~SHIPPING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -14.56% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~SHIPPING 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 -14.61%. It is interesting to note that both ~SHIPPING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Wealth is like sea-water; the more we drink, the thirstier we become; and the same is true of fame.
-- Arthur Schopenhauer

~SHIPPING 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 surge in ~SHIPPING's volatility from 17 Sep, 2018 to 10 Oct, 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 ~SHIPPING has significant positive skewness in it's return distribution. This indicates that investors can expect ~SHIPPING to recover from drawdowns quickly. Which makes ~SHIPPING a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~SHIPPING you may find it interesting to know that JKLAKSHMI has delivered similar performance as ~SHIPPING and can be considered as an alternative investment candidate (to ~SHIPPING).