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

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

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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:
  • Financials: +7.7%
  • Technology: +6.63%
  • Consumer Services: +10.67
  • Utilities: +4.39%
  • Consumer Goods: +16.55%
  • Health Care: +4.76%
  • Energy: +3.96%
  • Materials: +7.70%
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.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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