Customer Momentum
In plain terms
When a firm's major customer has a return shock, the supplier under-reacts — its stock drifts in the same direction the following month.
How it works
When a firm's major customer has a return shock, the supplier's stock drifts in the same direction over the following month — investors fail to update on the link. 113bps/month alpha.
Live results
12 times picked on its own · 282 times inside a blend (234 beat the stock) · updated 2026-06-06Data dependencies
- SEC filings text (Item 1)
10-K / 10-Q / 8-K cleaned text + section maps.
- Compustat segments
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- 113 bps/month original; 50-70 bps modern (Cohen-Frazzini 2008)
- Tested over
- 1980-2004
113bps/month original; modern 50-70bps/month
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
The 1-month lagged return of a stock's text-similarity peer basket (TNIC, crosses sectors) predicts the focal stock's next-month return.
If the sector ETF outperformed SPY recently but the stock hasn't caught up, info diffuses slowly — bet the laggard catches up.
Explore Customer Momentum on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.