sector rotation - Trading Studio (Page 2)

Growth of £10,000 in Sector Mean Reversion UK (LSE) vs FTSE 100 from 2000 to 2025

sector rotation

Sector Mean Reversion on UK Stocks (LSE): 9.42% CAGR, +7.86% vs FTSE 100

Sector mean reversion on LSE large-cap stocks from 2000 to 2025: 6.47% CAGR vs 8.02% S&P 500. The strategy consistently fires (101 of 104 quarters invested) but underperforms by -1.56% annually in GBP. Energy dominates as the most selected sector.

Growth of $10,000 invested in Sector Mean Reversion vs S&P 500 from 2000 to 2025, showing the strategy outperforming with stronger recoveries after the dot-com bust and 2009 financial crisis

sector rotation

Sector Mean Reversion: Buying What the Market Hates Worked for 26 Years on US Stocks

We tested buying the bottom 2 sectors by 12-month return on US large caps, quarterly, from 2000 to 2025. The result: 10.63% CAGR vs 8.02% for the S&P 500, a 1282% total return, and a 55.8% quarterly win rate over 104 periods.

Sector Mean Reversion CAGR by Exchange: 14 global markets from 2000-2025, showing most markets beat their local benchmarks, Germany as the exception

sector rotation

Sector Mean Reversion on 14 Exchanges: Germany Is the Only Market That Fails

Same sector mean reversion strategy across 14 exchanges. vs local benchmarks: Sweden +9.01%, Taiwan +8.97%, UK +7.86%, Korea +7.33% excess CAGR. Germany is the only market that fails to beat its local index (-0.59%). The benchmark matters.

Growth of CAD $10,000 in Sector Mean Reversion Canada (TSX) vs TSX Composite from 2000 to 2025

sector rotation

Sector Mean Reversion on Canadian Stocks (TSX): 11.17% CAGR, +5.91% vs TSX Composite

Sector mean reversion on TSX large caps from 2000 to 2025: 8.41% CAGR vs 8.02% S&P 500. The strategy barely edges SPY (+0.38% annually in CAD) but with extreme volatility. 2013 excess was -48.61%, 2015 was -28.37%, 2016 was +37.26%. Energy drives most of the variance.