Comparison of the Performances for Mean Reversion Strategy for DDAIF, Ford and VWAGY
DOI:
https://doi.org/10.54691/bcpbm.v38i.3949Keywords:
mean reversion; volatility market; unilateral tendency market; method points.Abstract
The mean reversion strategy argues that investors should buy low and sell high, for there is an average line for the stock prices. The price will always meet the average line of it. When the price is higher than the average line, it will drop. When the price is lower, it will increase. To test and validate the effectiveness of this strategy, this study chose three stocks in auto industry to comparison the performance of this strategy on them. According to the analysis, when it is in volatility market, the strategy performances good in auto industry, but in unilateral tendency market, it may get a bad profit. This paper gives an exact way to calculate the buy and sell method point, which can make direction for people to trade. Besides, it makes comparison for the strategy in 3 different stocks in same field. Therefore, one can learn the performance of it on different shape of stocks. These results shed light on guiding further exploration of mean reversion strategy on auto industry.
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