The Decision is made

 AMT, is the winner for now. and here is why.

I like the increasing Spread.

• Apple gained about 35% against the market
• American Tower Corporation (REIT) (AMT) lost about 12% to the market.

The Spread APPL / AMT looks like this.

• It doubled in a 12 month period
• The volatility is mostly given by Apple.
• The Trendline is the ideal walk but an asset or spread is moving around it. It is not ideal, never.

The ATR shows at 13.6 combined, 10-12 is ideal. The risk is a little bit increased but I attribute this also to APPL.

The volatility index BETA is 111.83%. We see the prediction is above 45 degrees because it is moving more than the market.

For AMT it is not as flat as I wished for but I will give it a try. BETA is at 98.78% and ideally should be at 70-80%. We see it close to 45 degrees!!

Whats next?

We run the weekly potential gain of the Spread back by 10 weeks and also compared it to some other candidates. We can see that APPL/AMT is challenged by APPL/NWN. The reason I decided against NWN is that we have huge abnormal moves in week 5 and 6. Plus 131% and minus 51%. Too extreme and that why we dropped it. The spread should generate a 14.44% return in 10 weeks, the intended hold on this asset. 

Now we run it through Capital Balancing sheet to determine the Share sizes according to the Theme and Position limits and to balance the BETA to remain market neutral. Remember, we make our profit inside the spread, the relationship the two stocks have with each other. We dont intend to gain on market moves! It is a spread trade, a hedge.

Thats it! We wait until the spread turns around at the ENTRY level and we might go in