--- title: "Dual Momentum: Formula, Meaning" description: "Gary Antonacci's approach that combines relative momentum, choosing the stronger of two or more assets, with absolute momentum, holding the chosen asset..." canonical: https://www.getswoopr.com/indicators/momentum/dual-momentum/ source: "Swoopr Investment: https://www.getswoopr.com" --- ## Direct Answer > Gary Antonacci's approach that combines relative momentum, choosing the stronger of two or more assets, with absolute momentum, holding the chosen asset only when its own return beats a safe benchmark such as Treasury bills. The relative test picks the stronger asset; the absolute test checks that it is also beating cash. Monthly or periodic rebalancing creates lag and can produce whipsaw around thresholds. # Dual Momentum: Formula, Meaning, Signals, Examples and How to Use It ## How Is Dual Momentum Calculated? Gary Antonacci's approach that combines relative momentum, choosing the stronger of two or more assets, with absolute momentum, holding the chosen asset only when its own return beats a safe benchmark such as Treasury bills. **Formula:** `Hold asset A if return(A) > return(B) and return(A) > risk-free return; otherwise hold the defensive asset` **Inputs:** - Trailing return of each candidate asset - Trailing return of a cash or Treasury bill benchmark - A defensive asset such as bonds or cash - Lookback (commonly 12 months) and review frequency **Worked example.** If the leading asset returned 9 percent against 3 percent for Treasury bills, its absolute momentum test margin is 6.0%. The inputs are illustrative numbers, not market data. **Reading it.** The relative test picks the stronger asset; the absolute test checks that it is also beating cash. If either test fails, the framework moves to the defensive asset. It is a decision rule rather than a continuous oscillator. **Limits.** Monthly or periodic rebalancing creates lag and can produce whipsaw around thresholds. Results depend heavily on the chosen assets, lookback and benchmark, and past backtests do not predict future performance. ## What is Dual Momentum? Gary Antonacci's approach that combines relative momentum, choosing the stronger of two or more assets, with absolute momentum, holding the chosen asset only when its own return beats a safe benchmark such as Treasury bills. ## How to use Dual Momentum The relative test picks the stronger asset; the absolute test checks that it is also beating cash. If either test fails, the framework moves to the defensive asset. It is a decision rule rather than a continuous oscillator. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime. ## Strengths - It applies two tests in sequence, relative strength between candidates and a check against cash, so each condition is stated explicitly. - The output is a discrete holding, the stronger asset or the defensive one, which makes the rule's current state unambiguous at each review date. - Reproducible when the formula and data convention are fixed. ## Weaknesses and limitations - Only two or three candidates are normally compared, so the rule concentrates in a few holdings and carries the single-asset risk of whichever is chosen. - The defensive asset sits outside the momentum test, so how the rule behaves in a downturn depends on how that asset itself performs. - Correlated indicators can create false confidence by repeating the same underlying information. ## Editorial and risk note This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance. ## Frequently Asked Questions Is Dual Momentum a buy or sell signal? No. The relative test picks the stronger asset; the absolute test checks that it is also beating cash. Monthly or periodic rebalancing creates lag and can produce whipsaw around thresholds. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions. What is the best setting for Dual Momentum? Dual Momentum takes these inputs: trailing return of each candidate asset; trailing return of a cash or Treasury bill benchmark; a defensive asset such as bonds or cash. There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner. Can Dual Momentum be used by itself? Monthly or periodic rebalancing creates lag and can produce whipsaw around thresholds. Results depend heavily on the chosen assets, lookback and benchmark, and past backtests do not predict future performance. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone. Does Dual Momentum work on every timeframe? The calculation can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it. Why does Dual Momentum give false signals? Only two or three candidates are normally compared, so the rule concentrates in a few holdings and carries the single-asset risk of whichever is chosen. The defensive asset sits outside the momentum test, so how the rule behaves in a downturn depends on how that asset itself performs. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated. How should Dual Momentum be backtested? Rebuild Dual Momentum from trailing return of each candidate asset using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline. S Swoopr Editorial Team The Swoopr Editorial Team produces independent investment education, research, and tools for understanding markets, evaluating opportunities, and managing risk. All content is educational only and does not constitute personalized investment advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).