Tag Archives: pairs

Pairs to beat the index blues

In a post on Tuesday I noted how difficult it is to predict daily moves in the Australia 200 index at the moment. On cue, I was stopped out of a short trade very soon after entry. What’s a trader … Continue reading

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Land and Sea – BLY vs MRM

Boart Longyear  and Mermaid Marine are in similar industries – both provide services to the mining industry. Both have just gone ex-dividend, but that’s where the similarities end. In trading over the last nine months, a huge valuation and share … Continue reading

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Pairs Trading – Buy BHP, Sell RIO

The recovery in iron ore prices since August appears to have driven an outperformance by RIO over BHP in Australia. However, both companies are also listed in London, and the degree of the outperformance is significantly smaller. Combined with stronger … Continue reading

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Pairs Trade – EUR/USD and GOLD

Pairs analysis sometimes throws up surprising results. Today’s trade is a case in point. Current market consensus suggests neither of the individual legs has appeal – but analysis points to a potential profit in a shift in relative value between … Continue reading

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Pairs for Performance

Professional investors watch the two largest sectors of the Australian share market very closely. Financial and Materials (largely miners) make up around two thirds of the value of all companies in the Australia 200 Index. The big picture view is … Continue reading

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Short German 30 – Outright or vs Australia 200?

The resilience of the German 30 index (tracking the DAX) continues to amaze. Markets appear to think the German 30 will remain immune from woes in Europe. After a bearish reversal on Friday, the only question for me is whether … Continue reading

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Pairs Trade – Sell Telstra, Buy Australia 200

Telstra is the best performing stock in the Australian top 50 over the last 10 months. Its defensive characteristics, the signing of the NBN deal and a compelling dividend yield (Telstra dividend yield table http://blog.cmcmarkets.com.au/2012/02/09/telstra-dividend-yield-table/ )have driven a massive out performance. There … Continue reading

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Buy CBA, Sell WBC

The Australian banking industry is dominated by the “Big Four” banks – ANZ, Commonwealth (CBA), National Australia (NAB) and Westpac (WBC).  Broader economic factors move the sector as a whole, but company specific factors can drive outperformance and underperformance. One … Continue reading

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Profit from Pairs

Despite a languid share market, two pairs trades highlighted on this blog illustrate the potential for profit from pairs, at lower market risk, regardless of the overall direction of the market. Today’s post looks at the performance of these trades … Continue reading

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Pairs Trading – an Explanation

Changing market conditions force traders to adapt. A popular response to market volatility is the increasing use of “pairs” – buying one CFD and selling another.

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