10.58 +0.17 (+1.63%) Sell

Profit booking on the minds of VEDL investors as it manages to marginally outperform broader market

13 min read

VEDANTA LTD (Foreign) was among the best performers today. It returned +1.63% to close at 10.58. It's recent 5 day performance has been -3.97%, -2.25%, -3.73%, -1.03% and +4.39%.

[Themes containing VEDL]

VEDL is currently in a down trend. The current bearish signal has generated a profit of +17.54% for investors in the last three months.


VEDL has been underperforming the SP500 index in recent time, after having outperformed till 2 Nov, 2017. Over the last 2 years 11 months and 7 days, VEDL outperformed the SP500 index on 51% days.

During the last three months VEDL was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +5.3%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.74%) was on Monday, 8 Oct, 2018. There was initially a bullish trend during this period which started on 13 Nov, 2018 and went on till 19 Nov, 2018. The bullish trend returned +7.01% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -10.98% of investor capital.

On monthly basis, VEDL delivered losses in more months over the last year, than profits. VEDL delivered profits less regularly than SP500 index. VEDL was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -17.04% compared to -7.28% returned by SP500 index in Oct 2018. VEDL had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from May 2018 to Aug 2018) during which period it delivered -30.46%. It is interesting to note that both VEDL and SP500 index significantly outperform during months when quarterly/annual results are announced.

Invest like a bull, sit like a bear and watch like an eagle. (mantra for long term investing)
-- Vijay Kedia

VEDL is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in VEDL's volatility from 13 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that VEDL 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.

SP500 index has more chance of extreme outcomes than VEDL. Therefore, SP500 must receive a lower allocation than VEDL in your portfolio. SP500 index usually has shorter drawdown period than VEDL.

Based on your interest in VEDL you may find it interesting to know that NVCN is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to NVCN or sufficiently diversifying your portfolio.

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