Pairs trading – Apple v ARM

The following chart plots the share price of Apple [AAPL] (in sterling) divided by that for  ARM [ARM] for the period since 2006.

Pairs trading - Apple [AAPL] v ARM [ARM]

A can be seen, for the past seven years the ratio has fluctuated between the bounds of roughly 0.34 and 0.84.

If the ratio is to continue to trade between these two bounds, Apple shares (in sterling terms) must increase relative to ARM.

 

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Technology Hardware & Equipment sector monthly seasonality analysis

The 2013 edition of the Almanac looks at the historic monthly performance of the FTSE 350 sectors. Here we look at the Technology Hardware & Equipment sector.

The following chart plots the average out-performance of the FTSE 350 Technology Hardware & Equipment sector over the FTSE 100 Index by month since 1999. For example, since 1999 on average the sector has out-performed the FTSE 100 Index by 4.0 percentage points in July.

Observations:

  1. The strongest months have been July and November – the sector has under-performed the market only three times in July in the last 14 years.
  2. The weakest months have been February and September – the sector has out-performed the market only five times in February in the last 13 years.

The six stocks in the FTSE 350 Technology Hardware & Equipment sector [NMX9570] are-

ARM Holdings [ARM] Laird [LRD]
CSR [CSR] Pace [PIC]
Imagination Technologies Group [IMG] Spirent Communications [SPT]
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