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))
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

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

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

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

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

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

New academic paper just came out on the results of overfitting backtest data and the resultant poor out of sample performance.

In other words, be careful when torturing the data.

Pseudo-Mathematics and Financial Charlatanism: The Effects of Backtest Overfitting on Out-of-Sample Performance

it's free  -- just hid download button at the top.

RW can be very useful, but you need to use it with care if you want something that will actually work.

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

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