Long/Short Equity Signals For Hedge Funds And Sophisticated Traders
The signals are generated by DLPAL software based on a universe of stocks suggested by the customer or standard universes based on indexes, such as the Dow Jones, the S&P 50, 100 or 500. The frequency of signals is usually daily but it can be also set by the customer, for example it can be weekly. These long/short equity signals are only available to hedge funds and sophisticated investors.
An example can be found in this article. A more recent example of long/short equity signals is shown below. This is the output of DLPAL software as of the close of January 30, 2017.
The results show the S&P 500 stocks that have long (P-long) and short (P-short) directional bias greater than 55% and significance S greater than 2. P-delta is P-Long minus P-short for each stock.
A long/short equity strategy is based on selecting a number of stocks with highest P-Long and P-short, often each multiplies by significance number.
For example, one could elect to go long MO, DUK and PEP and go short V, EMR, MMM in equal dollar amounts. Below is a spreadsheet based on 100K initial capital that calculates the number of shares for each stock, net P/L and return. The calculations include $0.01 per share commission.
Note that all trades are placed at the open of the next trading day MOO after the DLPAL results are generated and are closed same day MOC. The gain from this long/short equity trades in the above example was about 0.34% from open to close.
Update on 02/27/2017. We are working on a version of DLPAL specifically for long/short equity hedge funds. This version allows more flexibility in sorting results and generating output in csv format that can be used to enter trades via a broker API. Below is an example for DOW stocks ranked by highest product of P-delta × S and with half of the top stocks designated “long” and the bottom half “short”.
Details and pricing
We can provide signals based on the universe of stocks and frequency specified by the customer or provide on-site training, or via Skype, to those who would like to purchase a license of DLPAL to generate their own signals in house.
Contact us for pricing and more details.
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