An investor has in principle three questions to answer:
- Which portfolios of stocks screened out of my stock list are most poised to increase and most poised to decrease in value as my long and short portfolios?
- How much money should I allocate to each stock while optimizing my investment objective and given my total investment amount for each portfolio?
- How long should I hold on to these portfolios to optimize my investment objective?
DigiFundManager addresses those three questions in an innovative manner. It ranks stock selections using a simple StatArb algorithm. Its stock-allocation algorithm is based on a gradient search of steepest ascend. The optimum holding period spanning the entry and exit points of stock portfolios involves a search for the peak in the power spectrum of the portfolio-value fluctuations. The computations assume Market-On-Close orders.
Experience teaches us that DigiFundManager is able to screen, rank, weight, and time time series of optimal portfolios from a watch list of preselected stocks producing expected annualized rewards of 5% - 350% and where certain pre-selections hold the promise of a balanced risk/reward ratio of 0.5 - 1.5.