I've been watching the S share price to C share price ratio as it has had huge swings over the past two years, and I think it can be used as a viable trading strategy for folks who are generally holding long term.
The S share price is at it lowest compared to the C in years (although nothing beats the March 2020 plunge). I have been increasing my S purchases as we have seen this ratio plunge, but I am gaining more confidence in the ratio and would like to commit more heavily to basing my trades on this ratio.
Currently my thinking is that the S usually $9-10 higher than the C in share price (total history average is $6.7, recent average is much higher), it can climb as high as $26. Right now S is only higher than C by $5.05.
The attached graph is (S - C)/C to find the price difference ratio (it mirrors S/C but at smaller numbers). I want to work out triggers in this ratio to (1) go all in on S (maybe when the ratio cross 0.21), Sell S for C (maybe when the ratio crosses 0.3) and when to sell all and move to G (when the ratio crosses 0.385). These triggers would override my other trading strategy when they apply.
Thoughts, suggestions, and critiques are appreciated!
Developing A New Strategy: SC Ratio
Moderator: Aitrus
Developing A New Strategy: SC Ratio
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Re: Developing A New Strategy: SC Ratio
Either way, it seems it's generally a good time to be holding S if you are not near retirement (20 years left for me) and as soon as the month rolls over I'll be moving in that direction.
Re: Developing A New Strategy: SC Ratio
Horaenaut,Horaenaut wrote: ↑Thu Apr 28, 2022 12:34 pm The attached graph is (S - C)/C to find the price difference ratio (it mirrors S/C but at smaller numbers). I want to work out triggers in this ratio to (1) go all in on S (maybe when the ratio cross 0.21), Sell S for C (maybe when the ratio crosses 0.3) and when to sell all and move to G (when the ratio crosses 0.385). These triggers would override my other trading strategy when they apply.
It appear that your plots came from Excel.
Consider that (S - C)/C is equivalent to S/C - 1.
You might find it less time consuming to plot S/C in Stock Charts or TradingView and just shift your ratios by +1
12²
“The genius of investing is recognizing the direction of the trend – not catching the highs or the lows.”
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
Fund Prices2023-09-22
| Fund | Price | Day | YTD |
| G | $17.73 | 0.01% | 2.88% |
| F | $18.19 | 0.37% | -0.08% |
| C | $67.07 | -0.23% | 13.86% |
| S | $66.46 | -0.15% | 8.01% |
| I | $36.82 | -0.03% | 8.48% |
| L2065 | $13.63 | -0.15% | 11.17% |
| L2060 | $13.63 | -0.15% | 11.17% |
| L2055 | $13.63 | -0.15% | 11.17% |
| L2050 | $27.94 | -0.09% | 9.55% |
| L2045 | $12.83 | -0.08% | 9.15% |
| L2040 | $47.17 | -0.08% | 8.76% |
| L2035 | $12.56 | -0.07% | 8.29% |
| L2030 | $42.14 | -0.06% | 7.84% |
| L2025 | $12.12 | -0.02% | 6.05% |
| Linc | $23.96 | -0.01% | 4.84% |