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Mega-Cap Concentration Overlay

Updated dailyData needs: lowlong only

In plain terms

When the Mag-7 (AAPL/MSFT/NVDA/...) outperform together, the rest of the market mechanically lags. Use that as a rotation signal.

How it works

AQR's 2025 "A New Paradigm in Active Equity" identifies Mag-7 concentration as its own factor: when the Mag-7 (AAPL/MSFT/NVDA/GOOGL/META/AMZN/TSLA) outperform in concert, the rest of the market lags mechanically via index-weight rebalancing flow, and vice versa. Three variants: rotation_away (long non-Mag-7 defensives when Mag-7 leads), rotation_into (long Mag-7 mean-revert when their trend turns down), and regime_gate (only allow long exposure when Mag-7 trend is positive).

Live results

34 times picked on its own · 186 times inside a blend (142 beat the stock) · updated 2026-06-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 186 such blended picks (142 of which beat simply holding the stock). Picking it on its own is only one of the ways it shows up.

How its picks scored vs. buy & hold

Each pick is graded on a recent year it was never tuned on, against simply owning the same stock

Where its edge concentrates

Share of picks in each company-size group that beat buy & hold

How often it trades

Active vs. patient. Bars on the left mean it waits for rare setups; bars on the right mean it trades often

Return vs. buy & hold

How much each pick beat or trailed simply owning the stock over the test year (extreme microcap moves trimmed)

Loading substrate evidence…

Data dependencies

Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.

Expected edge

Signal construction (own-ticker variant — not the Mag-7 themselves): • Compute Mag-7 equal-weight return series from daily_prices • Rolling 60d Mag-7 cumulative return → mag7_trend • Variants: (a) "rotation_away": LONG ticker when Mag-7 trend > +5% AND ticker is NOT Mag-7 AND t

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