Developing A New Strategy: SC Ratio

General TSP Discussion.

Moderator: Aitrus

Post Reply
User avatar
Horaenaut
Posts: 102
Joined: Mon Apr 29, 2019 11:18 am

Developing A New Strategy: SC Ratio

Post by Horaenaut »

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!
You do not have the required permissions to view the files attached to this post.

User avatar
Horaenaut
Posts: 102
Joined: Mon Apr 29, 2019 11:18 am

Re: Developing A New Strategy: SC Ratio

Post by Horaenaut »

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.

User avatar
12squared
Posts: 484
Joined: Thu Dec 31, 2015 7:28 am

Re: Developing A New Strategy: SC Ratio

Post by 12squared »

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.
Horaenaut,
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

"You'll have to adapt or you'll be out of style."
- Robert Smith

Post Reply

Fund Prices2022-06-28

FundPriceDayYTD
G $16.93 0.01% 1.13%
F $18.60 0.02% -10.96%
C $58.12 -2.01% -19.21%
S $61.51 -2.03% -26.28%
I $32.40 -0.43% -17.85%
L2065 $11.97 -1.45% -19.56%
L2060 $11.97 -1.45% -19.55%
L2055 $11.97 -1.45% -19.55%
L2050 $24.96 -1.19% -16.87%
L2045 $11.50 -1.12% -15.88%
L2040 $42.43 -1.04% -14.79%
L2035 $11.34 -0.96% -13.58%
L2030 $38.22 -0.87% -12.29%
L2025 $11.20 -0.61% -8.57%
Linc $22.40 -0.34% -4.62%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".