Stock grid analysis is a dynamic portfolio framework where the analysis is based on Historical performances based on market cycles
Compared to the previous market falls, the big fall during the current COVID-19 pandemic so far is the steepest since the Global Financial Crisis.
Prabhudas Lilladhar have analyze this past behaviour of Nifty 50 constituents during and post market crises and divide stocks into categories showing consistent patterns as explained below in the table.
This performance analysis of the stock categories as per the framework used during the bottoms of the past market crisis. They calculate the market cap weighted performance of each category from the start of the correction and calculate the market cap weighed return of each category on the date corresponding to the market bottom.
On relative performance basis, Protective winners, Steady Performers and Economic Cyclicals consistently outperform during recovery periods, while Economic cyclical are quick to rebound
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