Competition universe for stock selection

Alphathon
#1

Hello,

To clarify about the competition rules - am I right to say that I can only allocate weights to stocks that are ‘currently’ in the S&P?

For example if netflix only gets on the S&P in 2010, I can’t allocate any weights before 2010. Wouldn’t really make sense otherwise as there would be a major selection bias if I were to trade stocks before they become a constituent as this universe only contains stocks that have ever been in the S&P

#2


You are right.

You can only select a stock which is a component of the S&P 500 index at the day of selection. Similarly, if the stock is not part of the S&P 500 anymore and at the same time in your portfolio, you will have to sell the stock and replace it with a new name.


Since you mentioned Netflix, you can only add Netflix in your portfolio from 17 Dec 2010 for instance