Query over Winning Styles

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19th Aug '20 by Groiders

5 comments 253 reads

Just another quick query from a complete newbie here...

My understanding is that a stock gets categorised as a "winning style" if it has at least two out of the three ranks (Quality, Value, Momentum) high. I thought a high value would have to be high enough to be coloured green, but have come across a stock where only one of the three ranks is green, yet the stock is still categorised as a winning style:

Just after some understanding on how this stock is qualifying as a winning style. Is the criteria just a fixed percentage threshold - say to be above 75?

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Groiders

Premium Member

5 comments

Edward Croft

19th Aug '20

@Groiders - no they don't have to both be green. We colour code the ranks green when they are above 80. But the algorithm that classifies the stocks into styles is a lot more subtle. It actually models a 3 dimensional Q-V-M space and classifies the stocks that are towards the corners in the dimension. Each corner being one of 8 different styles.

So it's a more forgiving algorithm and it allows us to classify up to a third of the market in 'winning' styles, and a third in 'losing' styles.

Groiders

19th Aug '20

Ah I see. Good to know. So if I just wanted to do a very basic vetting of stocks to say that they are high on at least two out of three stock ranks, would you say I should be looking at a figure of 75 and above on an individual rank (i.e. Q, V or M), or would that not be high enough?

Edward Croft

19th Aug '20

If you go to the Styles category in the Browse section... and select High Flyers, then click to the "Ranks" table view.. you can explore the range of values of Q, V and M that create high flyers.

https://www.stockopedia.com/screens/high-flyers-481709?view=ranks

While you will find some classic archetypes of High Flyer in there like Team17 (LON:TM17) which is right at the apex...

You will also find some more 'woolly' High Flyers that only just make it into the high QM, low V space. like 3i (LON:III)

Edward Croft

19th Aug '20

Yes - alternatively you could use one of the crossover ranks which are very useful - if you select for e.g. QM > 90 you'll get some candidates with a very high Q, but lower M. This allows a less harsh screening technique - which I really like and it's often more inclusive than screening for both Q> 90 and M> 90 which cuts out too many interesting candidates.

Try the crossovers - you'll find them in the StockRank bucket.

- QM Rank

- QV Rank

- VM Rank

Groiders

19th Aug '20

Thanks very much Ed. Lots to learn! :)

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Query over Winning Styles

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About the Author

Groiders

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