A sector rotation strategy that identifies the strongest sectors by momentum and invests in the top stocks within those sectors.
This page explains the Mars sector rotation strategy. You'll learn about the dynamic stock universe, how sectors are ranked by momentum, and how the portfolio is constructed from the top stocks in the strongest sectors.
The Mars strategy is a systematic sector rotation approach that ranks all sectors by their momentum return and invests in the top stocks from the strongest sectors. By rotating into the hottest sectors, the strategy aims to capture broad market trends and sector-level momentum.
Each day, all qualifying stocks are grouped by their sector classification. For each sector with enough qualifying stocks, the average momentum return is calculated to produce a sector score. The top sectors are then selected.
Unlike Gemini's fixed stock universe, Mars dynamically filters from thousands of classified stocks each day. Stocks must meet price and volume thresholds to qualify, ensuring adequate liquidity for position sizing.
This dynamic approach means the strategy can discover new opportunities as stocks meet the qualification criteria and naturally avoids stocks that have become illiquid or too expensive/cheap.
Stocks are classified into a diverse set of proprietary sector categories spanning technology, healthcare, financials, energy, industrials, consumer sectors, and more. The classification uses multiple data sources to ensure accurate grouping.
The strategy captures sector-level momentum trends, such as the rotation into energy stocks during commodity booms or the surge in technology during growth cycles.
All trading signals are generated at market close (Day T) and executed at the next day's open (Day T+1). This ensures realistic backtesting without look-ahead bias.
After market close, calculate momentum returns for all qualifying stocks, compute sector averages, and rank sectors. Select top stocks from the strongest sectors.
At market open, sell positions that are no longer in the top selection and buy new positions. Equal-weight allocation across all positions.
All performance figures are based on historical backtesting and are hypothetical. Past performance does not guarantee future results. This momentum strategy is designed for bull markets with clear directional trends — it can experience significant drawdowns during bear markets or prolonged sideways conditions. The backtest assumes perfect execution at open prices with no slippage. Real-world trading will differ. This is educational content, not investment advice.