Change In Industry Vol Profiles Animation

This animation looks simple and fun but it is in fact incredibly powerful tool to quickly analyze where market stands and how it got there.

Interpretation is the key. Also, please note that there could be and often are multiple interpretation with tools like these. One’s insight depends on the preferred investment style and risk preference.

All index values are rebased to 100 as of 28-Feb-2017 to make comparison easy. We follow this method throughout

• Each industry is represented by a bunch of underlying stocks and volatility and index values are simple mean of its constituents
• The animation helps us figure out how the risk-return profile of industry stocks change over time
• Of peculiar importance are stocks that move to left top and bottom quadrants. They represent strong up and downtrends respectively
• Any quick move to right top/bottom quadrants may signify a violent breakout/breakdown

All charts and animations are highly interactive and therein lies the true power of these tools

• Hovering over a particular point shows relevant information
• Double clicking on industry name on right will isolate the particular industry. Double click again to return
• Play button will play the animation but one could manually operate using the slider below. This is usually more useful

Industry Trends

• Indices rebased to 100
• Deselect some industries from the legend to reduce clutter

All NSE Stocks By Industry Risk Reward

This chart is logical extension of the earlier animation. All stocks are plotted on risk/return axes and categorized by industry. Instead of showing change over time, this on plots data on a specific date (usually the latest date).

• Our universe is 500 NSE stocks at the moment. This can easily be expanded
• Hovering over a particular point shows company name, 1M vol and index value
• As usual, double clicking on the industry filters stocks specific to those. Double click again to return
• We can identify trends as well as any sudden changes as explained in the earlier plot
• This plot provides a neat way to visualize point in time snap shot of all 500 stocks in one go and derive useful insights

Change In Sector Indices Vol Profiles Animation

This is very similar to the industry vol profile across time. Here we use various sector indices on NSE

All Stocks Of Sector Indices’ Animation

All stocks represented in the sector indices of previous plot.

Strong Uptrend

As explained earlier these tools are useful in identifying potential trending stocks in either direction. To save some trouble, here are the top 10 strongly upward trending stocks

Strong Downtrend

As explained earlier these tools are useful in identifying potential trending stocks in either direction. To save some trouble, here are the top 10 strongly downward trending stocks. There is some issue with data for BEL. Please ignore this one.

High Beta Stocks w.r.t. Nifty 50

Beta is a measure of how an individual stock is affected by the movement is broader market (Nifty 50 in this case) When constructing a portfolio of stocks it is important to consider their beta and diversify accordingly.

As always, interpretation can vary. Broadly

• High beta stocks will amplify any index returns (positive or nagative)
• If hedging is required for a stock in portfolio, beta helps in calculating approximate exposure to index instrument used for hedging
• High beta stocks can be used for speculative investments if one has strong view on market direction without utilising leverage

Low Beta Stocks w.r.t. Nifty 50

Beta is a measure of how an individual stock is affected by the movement is broader market (Nifty 50 in this case) When constructing a portfolio of stocks it is important to consider their beta and diversify accordingly.

As always, interpretation can vary. Broadly

• Low beta stocks’ returns are less correlated with index returns (positive or nagative)
• As a result these stocks are great diversifiers
• If one does not have a view on the future direction of broader market or thinks there is a lot of uncertainity ahead, these are useful to have i portfolio

SMA 20 Crosses Down In Uptrend

In an uptrend, prices crossing 20 day SMA in correction could be a good buying opportunity

SMA 20 Crosses Up In Downtrend

In a downtrend, prices crossing 20 day SMA in correction could be a good buying opportunity

Break out above Bollinger Band

Break out above the band could signal a fresh uptrend

Break out below Bollinger Band

Break out below the band could signal a fresh downtrend

Top Winners

Top 10 Winners For The Day

Top Losers

Top 10 Losers For The Day