April 2024 Update

Door Tako Paddenburg & Sjoerd Huitema

mei 02 2024

3 min gelezen

Deel:

April was another solid month for Streamline Trading, with a net performance of +4.4%. Congratulations to our investors who have benefited from their early decision to join us! Our performance stands out against the backdrop of the S&P500, which decreased by 4.2% last month. The correlation between Streamline Trading and the S&P500 has now dropped to 0.12, further demonstrating our effectiveness as a hedge in the financial markets. Our use of adaptive algorithms capable of strategic short and long positions, combined with smart diversification across uncorrelated financial markets, continues to prove its worth as a reliable hedge. The monthly analysis of our portfolio confirms the strength of our 24 algorithms operating across 12 diversified financial markets.

Highlights of the month

💹 Performance: Our portfolio realized a net gain of +4.4% VS -4.2% S&P500
📊 Monthly correlation Streamline Trading VS S&P 500 is now 0.12 since inception
⚙️ Algorithm activity: 22 of our 24 active algorithms executed automated trades last month.
🌎 Market engagement: Our algorithms operated in 11 of the 12 financial markets.
🔄 Trade volume: We completed a total of 142 automated trades last month.
🛠️ Algorithm performance: All 24 algorithms functioned within their designed parameters and continue to be operational.
🌐 Portfolio diversification: We maintained robust diversification with active trading across 12 different financial markets through our 24 algorithms.

Deepdive - Streamline Trading's best performing trades last month

🔽💴 Short Japenese Yen

The value of Japan's currency has plummeted, reaching levels not seen since 1990, when Japan's "bubble economy" burst. The yen dipped dramatically, touching 160 yen to the US dollar—a stark contrast to a few years ago when it hovered around 100 yen to the dollar. This decline is partly driven by a self-perpetuating cycle of selling by investors as the currency continues to fall. The sharp decline can also be attributed to major policy decisions by the Bank of Japan (BOJ), which has maintained exceptionally low interest rates for years to stimulate inflation, increase bank lending, and spur economic demand. Recently, the BOJ slightly lifted its short-term policy rate, ending its negative interest rate policy, but then decided to hold rates steady, signaling no immediate further increases. This decision led to another wave of selloffs, pushing the yen down to significant lows.

Over the past month, the Japanese Yen has experienced a significant decline, culminating in a 34-year low, followed by a sudden and sharp recovery. This rebound, which saw the Yen quickly rise from ¥159.5 to ¥154.5 against the dollar, has led traders to speculate about a likely intervention by the Japanese finance ministry. Although there's no confirmed evidence, the rapid strengthening of the Yen during a period of light trading volumes on a public holiday hinted at possible government action to stabilize the currency amidst widening interest rate differentials with the U.S.

During this period, Streamline Trading's algorithm effectively maintained a short position on the Yen and exited just as the market rebounded, securing a profitable outcome. This automated approach, free from emotional trading decisions, capitalizes on significant market movements efficiently. Our algorithm leverages decades of historical data to inform its strategies, resulting in strong returns for our investors.

🔼☕ Long Coffee

In April 2024, the coffee market experienced significant volatility, with arabica coffee reaching a new two-year high and robusta coffee setting a record peak. This surge was largely driven by concerns over reduced crop yields in Brazil and Vietnam, major producers of these coffee varieties. Specifically, Brazil's Minas Gerais region, which produces about 30% of the country's arabica coffee, received only 58% of its average historical rainfall, exacerbating worries about underproduction. Meanwhile, robusta coffee prices skyrocketed due to severe dryness in Vietnam, threatening to sharply reduce its coffee output by an estimated 20% for the 2023/24 crop year.

In April 2024, Streamline Trading's coffee trading algorithm held a long position as coffee prices increased. The algorithm exited the position at the peak of the market, securing profits for our portfolio. This example shows how our automated trading system effectively manages trades to take advantage of market conditions and secure gains.

Deepdive - Streamline Trading's least performing trades last month

🔼🌾 Long Cotton

In April 2024, cotton prices experienced a downward trend. Despite ongoing export sales, there was no significant demand increase to boost prices. For now, with demand staying relatively flat and major buying limited to predictable quantities for reserves rather than immediate mill use, the prices are expected to remain under pressure without significant upward momentum.

In April 2024, Streamline Trading's cotton trading algorithm encountered challenges, receiving long signals twice, both of which were exited at a loss. This resulted in the algorithm being the worst performer within Streamline Trading's portfolio for the month. However, it's important to recognize that drawdowns are a natural aspect of any trading algorithm's lifecycle. As long as the algorithm's performance remains within the expected outcomes, it retains its validity. Despite the setbacks this month, this algorithm continues to be a valuable part of our portfolio, offering a diversification benefit that enhances our overall trading strategy. This ability to spread risk and potentially smooth out returns across different market conditions underlines the importance of maintaining a diversified investment approach.

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Are you looking to diversify your investment portfolio? Streamline Trading offers a distinctive approach to help hedge and grow your capital, serving as an excellent way to diversify your investments. Explore how our strategy can complement your financial goals.

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