The thesis
news-sentiment runs a simple, legible rule: buy names with positive recent news sentiment, exit when sentiment turns negative. It operates over a 24-name large-cap universe spanning tech, financials, healthcare, staples, and energy — AAPL, MSFT, GOOGL, NVDA, JPM, V, JNJ, UNH, XOM, and peers. The appeal is interpretability: every position maps to a headline-driven rationale rather than an opaque factor blend. The strategy is currently live.
Recent activity
Live trading tells a more active story than the backtest. Since late May the book has put on five executed buys: AAPL (6 shares @ $312.06), MSFT (4 @ $428.23), BAC (35 @ $55.93), UNH (4 @ $402.85), and GOOGL (5 @ $360.40). That leaves roughly $9,500 deployed against $990.06 in cash, with total account value drifting between about $10,060 and $10,500 across the last week of scheduled runs.
Notably, every scheduled run from July 27 through August 3 executed zero trades and rejected zero — the sentiment gate simply isn't triggering fresh signals. The portfolio is holding, not trading. That is consistent with a strategy that acts rarely and then sits.
Backtest and validation
Here is where caution is warranted. Over 451 backtest days the strategy returned just 0.19% (CAGR ~0.10%), ending at $10,018.55 on a $10,000 base. The redeeming features are risk metrics: a shallow 0.05% max drawdown, a 0.74 Sharpe, and turnover of 36.53% on only 2 trades and $2 of fees. Win rate reads 0, which — with just two trades, likely still open — is more a sign of thin data than of losing bets.
Formal walk-forward validation did not pass. Across four folds, only one was positive — and it was the only fold that traded at all. Folds one through three (Aug 2024 through Dec 2025) produced zero trades and zero return; the entire result rests on fold four (Dec 2025–May 2026), which delivered 0.19% at a 1.5 out-of-sample Sharpe. A PSR of 0.923 looks encouraging, but the deflated Sharpe ratio of 0.551 — adjusted for six trials — is a more honest read, and it is unremarkable.
The balanced verdict
Strengths: the logic is transparent, capital preservation is excellent (drawdown near nothing), and the single active fold hints at a real, if modest, edge.
Risks: the sample is dangerously small. Two backtest trades and three empty folds mean the strategy's edge is essentially unmeasured — we cannot distinguish signal from luck. The signal fires so rarely that it may go quarters without acting, which is capital-inefficient even if each trade is sound.
The honest framing: news-sentiment is a low-risk, low-conviction candidate that has not earned promotion. Before scaling it, we need many more triggered trades across diverse regimes to confirm the sentiment gate does more than sit in cash.