This project analyzes the applicability of the RealDayTrading (RDT) strategy, originally designed for the US market, to the Norwegian stock market. The RDT strategy, popularized on r/RealDayTrading, uses relative strength against SPY (S&P 500 ETF) as a key indicator. This analysis investigates whether a similar approach using relative strength against the OBX index (Oslo Børs 25 Index) could be effective for Norwegian stocks.
One of the key statements in RDT is that they note that approximately 75% of stocks tend to move in tandem with SPY, regardless of their inclusion in the index. I therefore wanted to test this statement to see if it is true on the OBX aswell.
The analysis compares two approaches:
- Using relative strength against SPY (US market benchmark)
- Using relative strength against OBX (Norwegian market benchmark)
Key metrics analyzed:
- Comparison of open vs. close prices
- Market cap distribution
- Performance across different market conditions
- Historical stock data for Norwegian companies
- OBX index historical data
- Market capitalization data for top 50 companies
- Total comparisons: 240,082
- Matching predictions: 135,397 (56.40%)
- Differing predictions: 104,685 (43.60%)
- Total comparisons: 59,496
- Matching predictions: 35,838 (60.24%)
- Differing predictions: 23,658 (39.76%)
The analysis shows that:
- The strategy shows slightly better performance when applied to the top 50 companies by market cap
- There is a significant difference in predictions between using SPY and OBX as benchmarks
- The higher success rate with top 50 companies suggests that the strategy might be more effective with larger, more liquid stocks
analysis.py: Core analysis scripthighest_market_cap.py: Identifies top 50 companies by market capcompare.py: Compares SPY-based and OBX-based strategieshistorical_data/: Contains all historical data files (Not shared)data/: Contains processed data and results (Not shared)
Potential areas for further research:
- Analysis of sector-specific performance
- Investigation of optimal holding periods
- Development of market-specific adjustments to the strategy
- Backtesting with different market conditions
- Python 3.x
- pandas
- yfinance
- numpy
- Install dependencies:
pip install -r requirements.txt - Run the analysis:
python compare.py - View results in the generated CSV files and console output