Stock Pair Strategy in Investing (How is my strategy doing?)

 Go long and go short sounds more like catching a fly ball in baseball than an actual stock investing strategy. However, there is some research to support that returns could be higher if one pairs short term investment with long term investment value of similar stocks. All things being relatively equal one would expect eventual parity which would mean you could theoretically select undervalued stocks (short and long position pairing) for future growth and sell those that moved to higher than historical average value to reallocate resources to new prospects (adjusted strategy possibility). Fidelity has a fairly easy to follow explanation. Stock Pairing Strategy. You can also review a definition on Stock Pair Trading

Research on a stock-matching trading strategy based on bi-objective optimization

My Working Strategy Not Finished: I will keep adjusting and tweaking until I get something good. Seeking to create a funnel.  

1. Find a range of value to look at in terms of stock price. I'm looking at lower priced stocks that have room to grow. Low-Risk Anomaly 

2. Use current and future market trend projections to determine whether they fit in an upward swing. Look around for industry reports.

3. Diversify among multiple stocks in different industries versus a single type of stock to protect the whole portfolio. Investing in multiple industries.

4. Look for stocks that hedge each other. When stocks are declining in some arenas, they may grow in others. Watch how they counter each other and seek to mix a balance so as to benefit on total stock portfolio returns beyond individual stock performance. 

5. Seek out possible pairing of long and short selling and consider selling stocks consistently over average when compared to similar stocks. If a company appears well managed and run well then hang onto it. Pairing Strategy Bi-Objective Optimization

5. Buy and hold if in alignment with market trend. A few other weaker predictors include Fourth-Quarter Growth Rate in Personal Consumption Expenditures (gpce), Aggregate Accruals (accru), Credit Standards (crdstd), The Investment Capital Ratio (i/k), Treasury-bill Rates (tbl) 46 Stock Strategies. Thus if you want to delve more into the stats these may work.  

6. Undefined...still thinking about it. That is as far as I got. :) To be continued.....

-May 16th, 2024 I had a poor performing stock that was sitting in the abandoned account so I just sold it to clean it out so all stocks are newer as related to when I started formulating a strategy. My growth is 7.9%. That doesn't include the 3.4% current inflation rate. Its still a little under the average Average Stock Market Return 2024

-May 23, 2024 Most of the stocks are in a slump in the past few days but overall the portfolio is growing. The days gain was down but rests at about 4.91%

*This is not stock advice at all. Go talk to your advisor. Its just an exploration of a topic.