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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 IVZ?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on IVZ: -6.9 points a year over 31 years.

Total return
55.6%
Buy and hold
×12
CAGR
1.4%
Sharpe
0.08
Max drawdown
-79.7%
Trades
428
Out of sample
overfit
Years
31
1×10×19961999200220052008201120142017202020232026
StrategyIVZ

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on IVZ: -6.9 points a year over 31 years.
  2. Against the S&P 500 over the same window: -9.2 points a year.
  3. Total return +55.6% versus ×12 for buy-and-hold, with 428 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -79.7%.
  6. It beats in neither half of the history (split at 2011).
  7. It ranks #172 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 IVZ 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 IVZ → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

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

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