Yes, the Alpha Ratings can certainly be used in conjunction with other investment strategies, such as technical or fundamental analysis. The Alpha Ratings system in US benchmarks all listed instruments on a risk-adjusted return basis, providing ranks and ratings based on the consistency of generating returns. This information can be valuable for investors who utilize technical analysis or fundamental analysis in their investment decision-making process.
Technical analysis involves analysing historical price and volume data to identify patterns and trends that can help investors make rational investment decisions. By incorporating the Alpha Ratings alongside technical analysis, investors can gain additional insights into risk-adjusted returns of various instruments. This can help them make more informed decisions about when to enter or exit positions, based on the combination of technical signals and Alpha Ratings.
Similarly, fundamental analysis involves evaluating a company’s financial health, competitive position, and industry trends to determine its intrinsic value. By considering the Alpha Ratings alongside fundamental analysis, investors can assess the consistency of a company’s returns and compare it to its peers. This can aid in identifying companies with steady outperformance and potential for long-term investment or accumulation.
By incorporating the Alpha Ratings into their investment framework, investors can easily screen the entire market on a monthly basis, identifying instruments with high ratings and the potential for generating high risk-adjusted returns.
In summary, Alpha Ratings can be used as a complementary tool alongside other investment strategies.