@visuarchie sir, the Z-score strategy was not included in the pure momentum strategy because it is often considered more of a statistical method used to identify overbought or oversold conditions rather than a primary momentum strategy. Most momentum strategies focus on trend following and relative strength, which are easier to understand and implement for many investors.
As you know Z-score Strategy measures how far a data point (stock price) is from the mean, expressed in terms of standard deviations. A high Z-score might indicate overbought conditions, while a low Z-score suggests oversold conditions.
- This strategy can help identify potential reversals rather than pure momentum plays.
In contrast, traditional momentum strategies like trend following, relative momentum, and sector rotation are more directly aligned with the core concept of momentum investing, which is capitalizing on stocks that are already trending upward or downward.
For those interested in momentum investing, combining the Z-score with other momentum strategies might offer additional insights and enhance overall performance. The Z-score can act as a complementary tool to identify extremes and potential mean-reversion points within a broader momentum framework.
Your input please, why not other strategy than z score which you follow, please.
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