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 Prices2024-04-17
Fund | Price | Day | YTD |
G | $18.19 | 0.01% | 1.25% |
F | $18.68 | 0.50% | -2.85% |
C | $78.62 | -0.58% | 5.72% |
S | $76.27 | -0.89% | -1.07% |
I | $40.66 | -0.17% | 1.19% |
L2065 | $15.60 | -0.47% | 3.17% |
L2060 | $15.60 | -0.47% | 3.18% |
L2055 | $15.60 | -0.47% | 3.18% |
L2050 | $31.39 | -0.35% | 2.57% |
L2045 | $14.34 | -0.33% | 2.47% |
L2040 | $52.43 | -0.31% | 2.41% |
L2035 | $13.87 | -0.28% | 2.31% |
L2030 | $46.25 | -0.25% | 2.24% |
L2025 | $12.93 | -0.12% | 1.78% |
Linc | $25.29 | -0.09% | 1.55% |