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Finaxion Research · Stochastic: oversold cross (14, 3) · single stocks · Recomputed 2026-09-10

Does Stochastic: oversold cross (14, 3) work on ARE?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on ARE: -4.9 points a year over 29 years.

Total return
84.3%
Buy and hold
624.3%
CAGR
2.1%
Sharpe
0.03
Max drawdown
-71.0%
Trades
404
Out of sample
overfit
Years
29
1×10×24×1998200120042007201020132016201920222025
StrategyARE

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on ARE: -4.9 points a year over 29 years.
  2. Against the S&P 500 over the same window: -7.5 points a year.
  3. Total return +84.3% versus +624.3% for buy-and-hold, with 404 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -71.0%.
  6. It beats in neither half of the history (split at 2012).
  7. It ranks #144 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact f4bff284709b.

Exactly what was tested

%K(14) crosses above %D(3) in the oversold zone → entry. Held until %K exceeds 80 → exit.

How to read it

The verdict compares the strategy with buying and holding ARE over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on ARE → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

Finaxion Research (2026). Does Stochastic: oversold cross (14, 3) work on ARE?. Daily backtest 1962-01-01–2026-08-31, artifact f4bff284709b. https://finaxion.app/en/research/stochastic-oscillator/are

Not a recommendation. Past performance does not guarantee future results.