Complementary Shares for a Balanced Portfolio

[Lewylewylewy]

I thought it might be a fun exercise on this rainy day, to see if we can come up with couples of shares that perform throughout. For example, HLG + MEL. when it's rainy HLG suffers, but MEL has filled up reservoirs.

[Snoopy]

I thought it might be a fun exercise on this rainy day, to see if we can come up with couples of shares that perform throughout. For example, HLG + MEL. when it's rainy HLG suffers, but MEL has filled up reservoirs.

Not sure about the 'perform throughout' bit. If the earnings of one goes up while the earnings of the other goes down, does it not mean we are looking at a more average performance than if you had bet all on one of the investment horses? But if you mean by 'perform throughout' that such a pairing is more resilient to market shocks then I get your question. To some extent I put a lot of effort towards this kind of strategy because I am not a trader. So the idea of a more set and forget strategy that balances out market gyrations appeals.

I have both CEN and MCY in the energy sector. That's because high lake levels in the south do not seem to be correlated with high lake levels in the north. I don't understand the reason for this. But it is enough to observe that it happens more often than not. So by owning both shares, I don't have to guess which island will have the most supply lake inflow. And because I believe in 'reversion to the mean', it will always be clear to me that if I need 'capital out' or alternatively that I want to put more 'capital in', it becomes obvious which one of the pair I should be buying or selling.

SKL has its own 'internal balance' between the largely dairy interests of its agricultural business arm customers and the industrial business arm customers from a much diversified many market overseas picture.

Another one I have come to appreciate in my portfolio, from a hedging perspective, is PGW, a group exposed to a wide diversity of rural sub-sectors. Looked at in isolation, I don't think the performance of PGW has been that good over the years. But if you compare it to the NZX50, it seems not well correlated. So rather than try to add a 'put option' investment to balance your NZX50 holdings, why not try owning some of these PGW shares instead?

SNOOPY

[dabsman]

ATM and RYM. ATM for Infant formula for humans coming into the world and RYM serves the custard for those leaving... 😉

[GTM 3442]

I thought it might be a fun exercise on this rainy day, to see if we can come up with couples of shares that perform throughout. For example, HLG + MEL. when it's rainy HLG suffers, but MEL has filled up reservoirs.

Don't HLG sell raincoats?

[Lewylewylewy]

Lol I'm loving the ideas so far. I'd like to add a pairing of HLG who enjoy a high NZD so it's cheaper to import, plus SEK/SCL who enjoy a low NZD for exporting.