I will try to explain different types of factor investing in momentum strategy and will explain in detail of each Factor in coming time. Factor investing in momentum strategy typically involves selecting stocks based on various momentum-related factors. Here are some common types:
-
Price momentum: Selecting stocks that have had high returns over a specific period, assuming they will continue to perform well.
-
Earnings momentum: Choosing stocks with positive earnings surprises or upward earnings revisions, expecting continued strong performance.
-
Revenue momentum: Focusing on companies with accelerating revenue growth.
-
Return on equity (ROE) momentum: Investing in companies with improving return on equity.
-
Volume momentum: Considering stocks with increasing trading volumes, indicating growing investor interest.
-
Momentum Z-score: Using statistical measures like Z-score to identify stocks with extreme price movements compared to the average, assuming a continuation or mean reversion.
These factors can be combined or used individually to create a momentum-based investment strategy.
| Subscribe To Our Free Newsletter |
