Trading THEME

2730.32 -23.61 (-0.86%) Sell

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TRADING THEME investors check their stop-losses as it underperforms

13 min read

Trading underperformed today. It returned -0.86% to close at 2730.32. It's recent 5 day performance has been -0.54%, -0.27%, -1.2%, +0.16% and -0.36%.

[Theme constituents]

~TRADING is currently in a down trend. Over the last three months Buy-and-Hold has been a better strategy (returning +7.99%) for ~TRADING's investors than shorting it.


~TRADING has been underperforming the NIFTY-50 index in recent time, after having outperformed till 24 Apr, 2018. Over the last 3 years and 1 month, ~TRADING outperformed the NIFTY-50 index on 49% days. Which indicates that on days ~TRADING outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

~TRADING returned losses on 58% days in the last three months. During this time, it delivered on average +0.13% per day. It delivered it's best daily return of +4.52%, during this period, on Wednesday, 12 Dec, 2018. There was initially a bearish trend during this period which started on 14 Nov, 2018 and went on till 22 Nov, 2018. The trend delivered -4.83% losses to investors. This was followed by a bullish trend that started on 17 Dec, 2018 and ended on 20 Dec, 2018. This bullish trend delivered +3.86% to investors.

On monthly basis, ~TRADING delivered losses in more months over the last year, than profits. ~TRADING delivered profits less regularly than NIFTY-50 index. ~TRADING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -11.67% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~TRADING and NIFTY-50 index, both had periods of 3 consecutive profitable months. It is interesting to note that both ~TRADING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It's how you deal with failure that determines how you achieve success.
-- David Feherty

~TRADING is becoming less 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 ~TRADING's volatility from 12 Dec, 2018 to 16 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 ~TRADING 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.

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

Based on your interest in ~TRADING you may find it interesting to know that NIFTY-GS-15YRPLUS has shown remarkable performance and deserves to be on every investors' watchlist.

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