Zacks Rank #1 is based on expected positive price action after positive estimate revisions. Look at the attached “und” file how I select the best 12 out of that pack, making sure I don’t get penny stocks or micro caps, and I have enough trading liquidity for my money management. Hedging is the art of pairing risks of the same kind. So I pair my best ZR1 bets with the worst shorted ZR5 bets (look for second “und” file attached). RW doesn’t allow you to combo a long trade with a short one, so you have to export both strategies to Excel and add the gains/losses of the corresponding periods of both strategies. Over 12.5 years, your maximum drawdown is 11%, annual compounded growth rate is 30%/year, average weekly gains are just over half a percent, and YTD you got 17%. The first chart shows the performance of the added gains/losses, the second one takes the average of the two and makes the hedging equally weighted (Hedging ratio=1).

Kevin, how difficult is it to make hedging available through combo’s in RW?         



Attach file (image (.gif, or .jpg), screen (.und) or report (.rpd))
Robert
at 04/03/14 11:19 AM : RE: Hedging with RW

Blue Zero III
attachment files at 11/17/14 11:07 AM : RE: Hedging with RW

Robert
at 04/27/14 5:12 PM : RE: Hedging with RW

Robert
at 04/16/14 9:14 AM : RE: Hedging with RW

Robert
at 04/03/14 9:50 AM : RE: Hedging with RW

Fraser
at 07/17/12 4:23 PM : RE: Hedging with RW

Dravo
at 07/20/12 3:19 AM : RE: Hedging with RW


Nice strategy, Dravo.  Apologies if I've misunderstood the screens, but isn't there a big arb between small and large caps going on here as well as the arb of extimate revisions?  For this strategy to continue winning, small caps need to continue outperforming large caps? 


Attach file (image (.gif, or .jpg), screen (.und) or report (.rpd))

For questions or more information or to Order Today, call 1-800-767-3771, ext. 9392 or 1-312-630-9890, ext. 9392
You can also e-mail our Sales Support at: kevinm@zacks.com
Copyright 2012
Zacks Investment Research
111 N. Canal St., Suite 1101, Chicago, IL 60606
(800) 767-3771 ext. 9392