What Are Strongest S&P 500 Stocks in Each Sector?

By ChartLabPro.com  JAN 18, 2013 1:20 PM

Yahoo, Hartford Financial Services Group, CIGNA, and Dean Foods are some of the strongest stocks in their respective sectors.


Today my firm is reviewing the five strongest and weakest stocks in each sector. For those who are not familiar with our Buy/Sell ratings, we use a quantitative price methodology for ranking the strength of each stock. There are several ways to take advantage of this information for profitable investing. We like deploying a pair trading strategy. You can either do a dollar neutral or beta neutral weighting, depending on your objective, to neutralize risk. One reason we like this strategy is we would rather not deploy capital on a directional trade when the S&P 500 (INDEXSP:.INX) is at five-year highs.

For example, this is how you would have done over the last month if you were to get long the top five names and short the weakest names in each sector:
Over the same period, the S&P 500 was up 3.73%. Remember, you are not taking on the same risk when you neutralize beta. The first graph shows the annualized volatility, correlation, and portfolio beta based on an equal dollar weighted Consumer Services Long/ Short portfolio. 

To learn more about ChartLabPro's algorithm visit www.chartlabpro.com.
No positions in stocks mentioned.

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