Comparing BAC (+6.93%) Pair Trader vs JPM (6.32%) Swing Trader: Key Insights
Financial market participants are no strangers to the diversity of strategies employed to maximize their returns. Among them, two methods, Pair Trading, and Swing Trading, have gained popularity, with both techniques exemplified by specific tools. Today, we delve into comparing the performance of the BAC Pair Trader for the Financial Sector (Technical Analysis, TA) which yielded a 6.93% return, and the JPM Swing Trader: High Volatility Stocks for Active Trading (TA&FA), yielding 6.32%.
Firstly, the BAC Pair Trader for the Financial Sector leverages pairs trading, an essential component in the financial sector, which has shown an appreciable performance of 6.93%. Pair trading is a market-neutral trading strategy that matches a long position with a short position in a pair of highly correlated instruments, like two stocks. This strategy relies on statistical measures and the relationships between securities, profiting from the disparity between the two. BAC Pair Trader has demonstrated its effectiveness, outperforming its counterpart, the JPM Swing Trader.
In comparison, the JPM Swing Trader employs a strategy of capitalizing on stocks' price fluctuations over a short period, targeting gains from market volatility. Swing trading combines both technical analysis (TA) and fundamental analysis (FA), providing a broader perspective on the market dynamics. This approach proved potent as JPM Swing Trader achieved a return of 6.32%.
While the BAC Pair Trader slightly outperformed the JPM Swing Trader in returns, it's essential to consider the risk associated with each strategy. Pair trading often involves lower risk as it's a market-neutral strategy; meanwhile, swing trading can be riskier due to its dependency on market volatility.
The trading strategy for a bot trading pair trader and a bot swing trader works similarly to the human-controlled strategies, with the exception that decisions are made based on predefined algorithms. The advantage of bot trading lies in its ability to execute trades faster, more accurately, and without emotional bias. Depending on the algorithm's sophistication and market conditions, both can perform exceptionally well, with one not necessarily superior to the other.
Now, let's look at the future. Bank of America Corporation (BAC) and JPMorgan Chase & Co. (JPM) are due to report their earnings on July 18, 2023, and July 14, 2023, respectively. These dates are significant as earnings reports can significantly impact the market's perception of a stock's value, causing notable price fluctuations.
Momentum Indicator for BAC turns positive, indicating new upward trend
BAC saw its Momentum Indicator move above the 0 level on September 19, 2023. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 80 similar instances where the indicator turned positive. In of the 80 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where BAC's RSI Indicator exited the oversold zone, of 31 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for BAC just turned positive on September 12, 2023. Looking at past instances where BAC's MACD turned positive, the stock continued to rise in of 41 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BAC advanced for three days, in of 316 cases, the price rose further within the following month. The odds of a continued upward trend are .
BAC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 60 cases where BAC's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
BAC moved below its 50-day moving average on August 15, 2023 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for BAC crossed bearishly below the 50-day moving average on August 22, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BAC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for BAC entered a downward trend on September 01, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. BAC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.893) is normal, around the industry mean (1.005). P/E Ratio (8.230) is within average values for comparable stocks, (17.402). Projected Growth (PEG Ratio) (7.775) is also within normal values, averaging (3.515). BAC has a moderately low Dividend Yield (0.031) as compared to the industry average of (0.055). P/S Ratio (2.326) is also within normal values, averaging (2.482).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BAC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 72, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a major bank
Industry MajorBanks
BAC and
Correlation & Price change
A.I.dvisor indicates that over the last year, BAC has been closely correlated with WFC. These tickers have moved in lockstep 83% of the time. This A.I.-generated data suggests there is a high statistical probability that if BAC jumps, then WFC could also see price increases.