Dennison Mines vs StarBulk Carriers
Dennison is a mid-size uranium producer. StarBulk is a mid-size bulk marine shipper (grain, iron ore, coal ,etc.) The two sectors appear counter-cyclical, opening up an opportunity for a pivot between them. The specific equities chosen (DNN, SBLK) show a reasonably good reputation for not diluting shareholders. The ratio trade should work just as well using other equities in the sectors, these are just a couple of my personal favorites.
Compression between my high and low lines is 2:1, which means a quadrupling of shares over 1 full cycle (SBLK to DNN to SBLK) - this example swings fairly frequently, 7 times in 8 years - almost one pivot per year.
If you bought in mid-2016 with $1,000 and employed a conservative pivot strategy, swinging 100% of your holding exactly at the green ratio bands, your initial $1,000 will have ballooned to $64,000 over the course of 8 years.
You'll notice the ratio between these 2 has just tipped into the "pivot" range, suggesting a good buy price for the 2nd equity in the ratio, StarBulk Carriers.
Dennison is a mid-size uranium producer. StarBulk is a mid-size bulk marine shipper (grain, iron ore, coal ,etc.) The two sectors appear counter-cyclical, opening up an opportunity for a pivot between them. The specific equities chosen (DNN, SBLK) show a reasonably good reputation for not diluting shareholders. The ratio trade should work just as well using other equities in the sectors, these are just a couple of my personal favorites.
Compression between my high and low lines is 2:1, which means a quadrupling of shares over 1 full cycle (SBLK to DNN to SBLK) - this example swings fairly frequently, 7 times in 8 years - almost one pivot per year.
If you bought in mid-2016 with $1,000 and employed a conservative pivot strategy, swinging 100% of your holding exactly at the green ratio bands, your initial $1,000 will have ballooned to $64,000 over the course of 8 years.
You'll notice the ratio between these 2 has just tipped into the "pivot" range, suggesting a good buy price for the 2nd equity in the ratio, StarBulk Carriers.