Chicago Quantum Net Score picks and results: Jan 11, 2021 market close, dividend payers only

Jeffrey Cohen, President, US Advanced Computing Infrastructure, Inc.

Hello Chicago Quantum (SM) followers. About a year ago we developed a quantum algorithm, loosely based on the sharpe ratio, that picks attractive stock portfolios based on 1-year of historical pricing data. We run the algorithm on quantum computers from D-Wave Systems and/or on our own classical hardware.

We have two client testimonials here.

On Jan 11, 2021, after market close, we ran our model against NYSE, NASDAQ (Global Select & Global) and NYSEAmerican. We validate dividends, which means we exclude all stocks that have not paid a dividend during the measurement period. After validation, we end up with 1,678 stocks that pass validation, and have paid at least 1 dividend in the prior year.

These are the best picks (best CQNS score we found): $DIN, $KOS, $SMLP. I remember the excitement when $SMLP took off right away, but has since come back down. For those three stocks, equally weighted, your return would have been 1.96%, versus $SPY which returned -2.14%.

In a related run, we picked $CLX instead of $DIN, so we include both in a 2nd result. If you would have held $CLX, $DIN, $KOS and $SMLP, your return would be 3.75%, versus $SPY which returned -2.14%

An interesting note is that when we select from dividend-paying stocks only, our choices are more limited. We are eliminating about half the stocks. Also, dividend payers may be less risky overall, although in this case we see two oil companies offsetting each other (one produces the product, and one provides services to the producers).

In summary, our model outperformed the market during this turbulent time when only considering stocks that have paid a dividend in the past year.

These results were after 13 trading days. Only time will tell how these results hold up. We expect our model effects, which are based on 252 or 253 trading days data, to last from 25 to 35 trading days.

  • Best CQNS Score: +1.96% vs. — 2.14% baseline
  • Added 4th stock (slightly lower CQNS score): +3.75% vs. -2.14% baseline

Notes and Disclosures:

Over the past 3 months I have invested personal capital into some of our previous picks to better understand how the model works, how investors might trade these picks, and to live a ‘day in the life’ of our customers.

When we run the model for a paying client, we avoid conflict of interest by keeping those picks private, and only sharing them with the client. We will not run a model for our ‘house account’ on that day.

These picks were from days with no paid client runs. You can learn more about our firm and services here on our homepage.

By way of disclosure, I am long $SMLP in my personal brokerage account, and all other positions are held either in active hedge funds or passive, indexed mutual funds where I do not influence trading decisions.

We are not investment advisors, and this is not investment advice. Please do your own research and due diligence before investing. Investing in stocks can and does involve risks, and you can lose your entire investment.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store