Not necessarily. Rather this is focusing on stocks that are rising without significant deviations on either upside or downside. The way it is defined it looks for stocks that have steady price movements. The rest of the things that you mentioned have quite a bit of discretionary input which I am not comfortable with at all. To build a lower volatility in a portfolio mathematically at least, we would have to deploy a minimum volatility matrix-based allocation which takes the correlation of volatility between different stocks in a portfolio for allocation. While that is a novel strategy the backtests in different papers have shown that it doesn’t differ much in terms of returns with low-volatile portfolio which has a momentum wrapper.
I am not saying that what you are proposing is wrong. It’s just that I want a proper entry-exit model which incorporates low volatility and close-to-high momentum. These rules work for me to be able to stick with them during the good and bad times.
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