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WINNING

Contrastive Pairs

Long the cheap stock in every hot sector: WDC not NVDA, HRB not SNOW, ADP not WDAY

Contrastive Pairs (Value Side of Hype Sectors)

3Y
Total Return
+117.8%
3Y
Sharpe Ratio
1.20
3Y
Max Drawdown
-25.4%
3Y
Win Rate
54.2%
3Y
Alpha
+6.6%
3Y
Comp. Score *
0.34
Risk Parameters
Max Allocation11.8%
Stop Loss10.0%
Take Profit5.0%
Max DD Tolerance25.4%
Rebalanceweekly
Execution Guidance
Order TypeLimit
Entry RuleEnter when Z-score exceeds 2.0. Exit when Z returns to 0.
TimingWAIT FOR SIGNAL: Only enter when price spread between paired stocks reaches extreme levels. *
ScalingFull position at entry. No scaling — it's a convergence trade.
Positions — Vol-Adjusted Sizing
SymbolActionVol Stop LossTake ProfitSizeLinks
WDC BUY 58% 24.2% below entry 12.1% above entry 4.9% TVYH
NFLX BUY 33% 13.8% below entry 6.9% above entry 8.6% TVYH
ORCL BUY 53% 22.3% below entry 11.2% above entry 5.3% TVYH
HPQ BUY 35% 14.5% below entry 7.3% above entry 8.1% TVYH
MU BUY 63% 26.3% below entry 13.2% above entry 4.5% TVYH
HRB BUY 31% 12.8% below entry 6.4% above entry 9.2% TVYH
ADP BUY 20% 8.5% below entry 4.3% above entry 13.9% TVYH
PAYX BUY 24% 10.1% below entry 5.1% above entry 11.7% TVYH
FISV BUY 47% 19.8% below entry 9.9% above entry 6.0% TVYH
WBD BUY 54% 22.8% below entry 11.4% above entry 5.2% TVYH
▶ For Passive Investors (Buy & Hold)

This strategy is suitable for passive investing. - Take profit: Rebalance when any position exceeds 2x its target weight. Trim back to target, redeploy to underweight positions. - Stop loss: NO price-based stop loss. This strategy recovered from -36% drawdown to return 255% long-term. - Exit rule: Exit when spread Z-score returns to 0. The convergence trade is done.

Avg 5Y Return
105.3%
Avg 5Y Sharpe
0.55
10Y Return
255.3%
10Y Sharpe
0.51
HODL Composite
0.78
Consistency
89%
Suitable for passive
Yes