Looking at Relative Strength by Industry Group

Here's a look at the relative strength of the ten S&P 500 industry groups since the beginning of the year. I took each sector index and divided it by the S&P 500, and based that to 100 at the start of the year.

What's interesting is that only three of ten sectors are leading the market this year. What's also interesting is that since April, it looks like a logjam. This is important because it shows that stocks are highly correlated among themselves -- no group is really standing out.

In the hedge fund biz, it's all about finding out who's doing something that everyone isn't.

Comments

[richjoy403:]

<<"In the hedge fund biz, it's all about finding out who's doing something that everyone isn't.">>.

So, you're saying hedge funds are not momentum players, but are value players who play for a return to the mean? If so, isn't this a significant change in strategy?--and if they are investing their many billions in that manner (which requires a long term strategy to realize gains), isn't such a change in strategy a noteworthy event?

Jul 07 08:34 AM