Top 30 US Equities Pairs: Trade of the Month April 2018

Continental Resources Inc. (CLR:NYSE) vs WPX Energy, Inc. (WPX:NYSE)

Profit of $800.03 in 30 calendar days on $10,000/leg.  That’s 8.0% on nominal leg value and up to a 24.0% return on CFD margined equity (max 6:1).

Summary Profiles (Source: Yahoo! Finance, Company websites)

Continental Resources, Inc.explores for, develops and produces crude oil and natural gas properties in the north, south, and east regions of the United States.The company sells its crude oil and natural gas production to energy marketing companies,

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Top 30 US Equities Pairs: Trade of the Month March 2018

Precision Drilling Corporation (PDS:NYSE) vs Superior Energy Services, Inc. (SPN:NYSE)

Profit of $925.30 in 48 calendar days on $10,000/leg.  28% return on CFD margin (6:1 leverage)

Summary Profiles (Source: Yahoo! Finance, Company websites)

Precision Drilling Corporation provides oil and natural gas drilling and related services and products. The company operates in two segments, Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the oil and natural gas industry.

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Top 30 US Equities Pairs: Trade of the Month Feb. 2018

Apogee Enterprises Inc (APOG:NASDAQ) vs Masonite International Corporation (DOOR:NYSE)

Resulting Gross Profit of $1,328.68 in 61 calendar days on $10,000/leg.  That’s 13.3% on nominal leg value and up to a 40% return on CFD margined equity (max 6:1).

Summary Profiles (Source: Yahoo! Finance, Company websites)

Apogee Enterprises, Inc. designs and develops glass products and services in the United States, Canada, and Brazil. The company operates through four segments: Architectural Glass, Architectural Framing Systems, Architectural Services,

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Top 30 US Equities Pairs : Trade of the Month January 2018

 

Lakeland Financial Corporation (LKFN) vs. WSFS Financial Corporation (WSFS)

Resulting Gross Profit of $494.63 in 14 calendar days on $10,000/leg.  That’s 4.9% on nominal leg value and approx. 25% return on CFD margin equity.

LKFN is a small bank holding company offering consumer banking and wealth management services to retail customers and is based in Warsaw, Indiana.  It specialises in real estate and agribusiness loans.  The company operates 49 branch offices in North and Central Indiana.

Closing Share Price (LKFN:NASDAQ) as of 29 January 2018: $48.42

LKFN Valuation Measures (Source: Yahoo!

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Tips when Trading Commodity ETFs

ETFs have become highly sought after investments due to their prices. Real commodities are expensive and need inventory, while ETFs are cheaper and do not need physical storage.

Buying ETFs is easy as they can be purchased through a service broker or an online provider. Despite this, however, there are specific considerations that traders must keep in mind when trading commodity ETFs.

So, if you trade commodities, here are some expert tips for you to consider moving forward.

The volume that appears on the screen does not automatically equate to its liquidity

Unlike stocks and LICs,

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Tips on Setting Up My Watch List – Avoiding Industry and Single Stock Concentration

Your watch list will act as your home screen where you can evaluate pairs that have back tested through the Pair Trade Finder system.  After you have gone through the process of finding pairs to evaluate, back testing them, and adding them to the system, your pairs will be viewable on your watch list. There are a few important issues you should consider when developing a portfolio of stock pairs to watch, which include the number of specific industry pairs you should monitor, single stock concentration and how to anticipate a signal.

After you have gone through the process of finding companies that are in similar industries,

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The Mother of All ETF Pair Trades May Be Setting Up…

An interesting analysis from Goldman Sachs on the ETF’s with the highest concentration of funds in their top three constituents, and an ETF pair trade idea from Zero Hedge on how to arbitrage the resulting risk:

http://www.zerohedge.com/news/2017-05-11/these-are-most-and-least-concentrated-etfs

Enjoy.

Pairtrade Finder

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Pair Trade COH Versus TJX

The Pairtrade Finder analytic generated a signal to purchase TJX Companies and Sell/short Coach.  Both companies are in the retaill space.  Coach surged on better than expected earnings, but is likely to run into resistance after climbing nearly 10%, as sales missed expectations.  TJX is scheduled to release its financial results in 2-week.  The watchlist shows the levels to enter the trade, as the stretch reached 2.7 standard deviations above the 100-day moving average.

The backtest of the two stocks shows that over the past 3-years 8-signals were generated with a stretch of 2.7 standard deviations for an entry criteria,

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Pair Trade BBT Versus CFG

The Pairtrade Finder analytic generated a signal to purchase BB&T Corp and Sell/short Citizens Financial Corp.  Both companies are in the financial space.  Both stocks were buoyed following better than expected earnings, although the CFG was definitely a larger surprize.  BB&T was upgraded and should recoup some of its recent losses versus CFG.  Both companies released their earning during the week ending the 21st.   The watchlist shows the levels to enter the trade, as the stretch reached 2.7 standard deviations below the 100-day moving average.

 

The backtest of the two stocks shows that over the past 3-years 4-signals were generated with a stretch of 2.7 standard deviations for an entry criteria,

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Look At That Divergence! Are Target and Walmart a Pair Trade?

Based on the last year of price history, it would seem there is quite a divergence between Target (orange) and Walmart (white) share prices (see Bloomberg chart below). The pairs look fairly correlated, and there is a large divergence, so should you expect a return to the mean, and short Walmart and go long Target? divergence 419

Upon further consideration, this would be a dangerous trade to take.  First the y-axes are not synchonised and the prices have not been re-based to zero.

If one rebases the prices to zero (see below), then one can see that over the past year there is little correlation between the two pairs and that the divergence does not necessarily indicate any potential reversion to the mean.

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