Which day of the week gives maximum return in weekly rebalance? any Guess.
Here is the take:
The optimal day of the week for rebalancing in a weekly momentum strategy can vary depending on the specific strategy and market conditions. However, some insights can be drawn from research and practical applications in the field.
For instance, Alok Jain from Weekend Investing suggests that the best day to rebalance can be based on historical data and the specific nature of the strategy being used. The key is to ensure that the portfolio is aligned with the strongest performing stocks each week (Weekend Investing) (Weekend Investing).
Studies have shown that rebalancing on Mondays tends to be popular among some strategies due to the potential market movements over the weekend. However, some investors prefer mid-week rebalancing to avoid the volatility often seen at the beginning and end of the trading week. Ultimately, the choice of day might depend on the specific backtesting results and the characteristics of the portfolio.
It’s essential to test different days of the week using historical data to determine which day maximizes returns for your specific strategy. The overall goal is to maintain alignment with the strongest momentum stocks while minimizing the impact of market noise and volatility.
To fine-tune your strategy, consider backtesting with platforms like Streak by Zerodha, which allows you to experiment with different rebalancing schedules and identify the most effective day for your portfolio (Weekend Investing) (Weekend Investing).
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