SUGAR THEME is a falling knife, continues to bleed every investor trying to catch it

Sugar delivered massive losses today. It lost -0.46% to close at 1796.06. During the last week it grew by +4.55% and saw a maximum drawdown of -1.99% before bouncing back.

[Theme constituents]

Buy-and-Hold investors in ~SUGAR experienced a maximum drawdown of -23.02% over the last three months. It lost -17.09% during this strong down 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 +3.94%.

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Monthly Performance

Alpha (outperformance)

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Return distribution

~SUGAR has been underperforming the NIFTY-50 index in recent time, after having outperformed till 30 Oct, 2017. Over the last 2 years 11 months and 13 days, ~SUGAR outperformed the NIFTY-50 index on 47% days. Which indicates that on days ~SUGAR 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 ~SUGAR was mostly loss making and delivered on average -0.26% per day. It's best return during this period (of +8.28%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -8.7%) was on Friday, 21 Sep, 2018. There was initially a bullish trend during this period which started on 6 Nov, 2018 and went on till 12 Nov, 2018. The bullish trend returned +10.99% to investors. This was followed by a bearish trend that started on 20 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -9.77% of investor capital.

~SUGAR had 4 profitable and 8 loss making months over the last year. During the last year, ~SUGAR underperformed NIFTY-50 index on monthly return basis. ~SUGAR was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -26.92% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~SUGAR had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Jan 2018 to Jun 2018) during which period it delivered -64.6%. It is interesting to note that both ~SUGAR and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Behind every stock is a company. Find out what It's doing.

~SUGAR 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 ~SUGAR's volatility from 17 Sep, 2018 to 4 Dec, 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 ~SUGAR has significant negative skewness in it's return distribution. This indicates that ~SUGAR is very risky for short-term investment and can significantly underperform for long durations.

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

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