Sector Model Service
What is the service?
The Sector Model Service capitalizes on the
observed fact that companies in different economic sectors often have very
different characteristics and need to be judged by different standards. The Sector
Model accomplishes this by identifying each sector's distinctive response
to momentum and valuation forces in the markets, and uses that information to
forecast each individual stock's probable excess return (alpha) for the next 1-3 years.
The Sector Model methodology uses five individual momentum factors
and five individual valuation factors to analyze
every stock. A stock's ten scores on
those factors become its inputs to the Sector Model, which combines
the scores according to the optimal factor mix for that economic sector. For
example, the momentum factors receive the most weight in analyzing Information Technology
stocks, while Energy sector issues have much more weight
applied to their valuation factors. The resulting Sector Model
ranking is a forecast of the stock's expected alpha relative to the entire
market.
What makes it different?
- Utilizes sector-specific stock ranking methodology
- Constructed with Gradient Maximization
technology
- Designed for institutional holding periods
- Stands up to realistic transactions costs
- Adapts to changes in market environment - reoptimized annually
Who should use it?
Portfolio managers whose results are judged against a general
equity benchmark, or who invest in a particular economic sector.
What do I receive?
Weekly rankings (1 to 10, see the graph below) for 6,000+ US stocks from the
Sector Model that characterize each stock's expected alpha
What do the rankings mean?
How do I get the rankings?
- Electronically via the Internet (access from the Columbine Web site, E-mail, or FTP)
- FactSet data system
- Hard copy reports via overnight express & fax
 |
Click to download a sample of the current model report (PDF format) |
How has it performed?
What are the inputs?
The Sector Model's stock rankings are a
sector-specific synthesis of each issue's scores from both momentum and valuation factors.
Here are the Sector Model's input factors:
Factor Definitions
How can it help me?
- Source of Buy ideas
- Objective backstop to your own analysis
- Establish a Sell discipline
- Foundation for creating your own model
- Alphas for input into a portfolio optimizer
- Complete stock selection system
Click here for more information on the
Sector Model
Top
|
