Quant Investing, the trusted platform for personal investors protecting and growing their money, is thrilled to announce the addition of an innovative screening factor to our stock screener - the Momentum Composite Indicator.
About the Momentum Composite Indicator
The Momentum Composite Indicator is designed to help you find stocks, not only with positive momentum, but also with low volatility.
It does this by combining three momentum and one volatility ratio into one easy to use indicator.
Here's how it’s calculated
Momentum Composite Indicator is calculated as follows:
Step #1
Firstly, all the companies in the screener database are ranked individually by the following four indicators:
- Price Index 3m, (Three-month price momentum) - Higher is better
- Price Index 6m, (Six-month price momentum) - Higher is better
- Price Index 9m (Nine-month price momentum) - Higher is better
- Volatility 12m (Twelve-month price volatility) - Lower is better
Step #2
Secondly, the four rankings are combined into a single number for each company.
Step #3
Thirdly, the combined ranking is then recalibrated to ensure that the 1% top-ranked companies (best) receive a value of 1, the next 1% a value of 2, and so on, up to the 1% worst-ranked companies, which receive a value of 100.
This process results in a composite momentum value for each company in the screener, ranging from 1 (best) to 100 (worst).
How to select the best Momentum Composite companies
To select the 10% of companies with the best Momentum Composite set the screener sliders from 0% to 10%.
Available in the Current and Historical Screener
The Momentum Composite Indicator is available in both the current and historical screener, giving you access to daily updated as well as past data for back testing.
Why Momentum and Volatility Matters
Momentum and volatility are powerful investment factors!
Research has shown that companies with strong momentum tend to continue their upward trajectory.
Similarly, research has shown that companies with low volatility continue to have low volatility.
By integrating this composite indicator into our screener, Quant Investing empowers investors to find stocks with the potential for sustained growth and low volatility.
Tested and Proven
The effectiveness of the Momentum Composite Indicator is underscored by research, such as the work of O’Shaughnessy Asset Management. Their research found a composited approach to measuring momentum, like our Momentum Composite Indicator, led to annualized returns significantly higher than individual momentum factors.
At Quant Investing, we believe that by providing personal investors with cutting-edge tools and insights, we empower them to make better decisions and build robust high-performance portfolios.
Start Using it Today
Ready to explore the Momentum Composite Indicator?
Why not take a minute and sign up for our screener right now! It costs less than a cheap lunch for two and if you do not find it helpful, we give you all your money back, no questions asked.
Invest with confidence. Invest with Quant Investing.
Click here to start using the Momentum composite indicator to find better investment ideas
