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TNIC peer relative-value reversion

Updated dailyData needs: highlong onlyshort onlylong short

2016

Hoberg, G., & Phillips, G. (2016). Text-Based Network Industries and Endogenous Product Differentiation (TNIC). Journal of Political Economy, 124(5).

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In plain terms

When a company drifts away from its closest product-market rivals, it tends to drift back.

How it works

Trades the focal name's dislocation FROM its TNIC product-market peer basket rather than the peers' lagged direction. The common product-market factor is de-meaned out (spread = focal return minus peer-basket return), leaving the idiosyncratic gap, which mean-reverts. This is the market-neutral cross-section of the TNIC spillover.

Live results

124 times picked on its own · 234 times inside a blend (223 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 234 such blended picks (223 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)

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Data dependencies

Entity graph edges
A data feed this strategy reads, refreshed on its normal schedule.
Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
Tnic peers
Hoberg-Phillips text-based industry classification peer lists (annual).

Expected edge

Market-neutral reversion of a stock toward its text-based product-market peer basket, isolating idiosyncratic dislocation from the common peer factor.

Related families

TNIC product-market peer momentum spilloverFilings, Insiders & Ownership

When a company's closest product-market rivals trend, this one tends to follow.

TNIC product-market peer reversal spilloverFilings, Insiders & Ownership

When a company's product-market rivals jump or drop sharply, this one tends to move the opposite way next.

13F co-holder relative-value reversionFilings, Insiders & Ownership

When a stock drifts away from the other companies the same big funds own, it tends to drift back.

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