The FTSE factor with the largest residual is Momentum. To find the best stock to buy or sell to position for a correction of that factor, I will use the sorted residuals from the getEquityIndexMembersSortedResiduals action.
Based on the sorted residuals, I recommend selling AutoTrader Group plc (AUTO.L) as it has a positive residual, indicating it is overvalued. Buying GlaxoSmithKline plc (GSK.L) is recommended as it has a negative residual, indicating it is undervalued.
Based on the residuals to the Momentum factor, SGE.L is the most undervalued.


Leave a comment