- Orpheus Capitals - http://orpheus.asia -

TGN VS. TEL VS. DAFOR VS. XNG

Posted By Domnita On January 21, 2011 @ 11:41 AM In Central and East European Region,Energy Pairs and Assets,Research Updates | No Comments

[1]

Transelectrica (TEL) is a 472 million dollar market cap Electric Utility, Transgaz (TGN) is a 1 billion dollar market cap Natural gas utility which also features in GICS oil & gas storage & transportation sector, Dafora is a Romanian small cap stock in Oil and Gas drilling and XNG is the AMEX Natural Gas Index. What do they all have in common? All these components are from the late economic sector. How do we find out which one is better for the months ahead and which one to hold and which one to reduce? Is this not what stock picking is about?

Rieki performance cycles have a simple objective answer for this query. Rieki can not only individually illustrate performance cycles of individual assets, but also illustrate seasonality in a pair. If you want to know which component of the pair should outperform the other you can use Rieki. And the best part is that you can make any pair combination.

In Fig. 1 we have illustrated the Rieki pair performance cycle between TGN and TEL. As one can see the cycle (red dashed) line was up from Jan 2010 till Jan 2011. This mean that TGN outperformed TEL by  almost 30% in the year. And now the Rieki cycle for the pair has turned down and also the relative performance line has broken a key trendline support. This means it’s time for TGN to underperform TEL. Since start of the year,  TGN has already underperformed TEL by 15% and we think there is more to come.

Now since both TGN and TEL are the absolute best performers and are overstretched, we need a stock that should outperform TEL. We paired Dafora with TEL (Fig 2.). What did we observe? We saw that after underperforming TEL by nearly 80%, Dafora – TEL Rieki is turning up. When this happens Tel should underperform Dafora. And where does Dafora stand globally? We paired it with AMEX natural gas index XNG. What did we observe?  XNG – Dafora Rieki is reversing. This means Dafora is potentially the best to accumulate while for TEL and TGN, the Rieki stock filter suggests reduce.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research products.


Article printed from Orpheus Capitals: http://orpheus.asia

URL to article: http://orpheus.asia/2011/01/21/tgn-vs-tel-vs-dafor-vs-xng/

URLs in this post:

[1] Image: http://orpheus.asia/wp-content/uploads/2011/01/210111.TGN_.TEL_.DAFORA.XNG_.png

Copyright © 2010 Orpheus Capitals. All rights reserved.