Sympathy Play: 292 Earnings Days, and How Far the Peers Moved
A sympathy play is a trade in a stock that has no news of its own, taken because a closely related company, usually the industry leader, just moved sharply on its earnings or other news. The idea is that the same forces apply to the peer, so part of the leader's move should spill over to it.
A sympathy play is a trade in a stock that has no news of its own, taken because a related company just moved sharply on its news. The usual trigger is the industry leader’s earnings: the leader gaps, and traders buy or sell the smaller names in the same business. This page counts how far the peers of five leaders actually moved on 292 earnings days from February 2012 to August 2026.
How it forms
The leader reports. A large company publishes quarterly results, and the price reprices the next session. Its numbers often say something about the whole industry: chip demand, freight volumes, shoppers’ spending.
Traders look for the read-across. If the leader’s customers are buying more chips, the other chip makers may be selling more too. The peer has not reported yet, so the market has to guess, and the guess shows up as a move in the peer on the leader’s reaction day. That spillover is the sympathy move.
The sector fund moves as well. A fund such as a semiconductor ETF holds the leader and its peers, so it moves on the same news. The sector ETF page covers what those funds hold. The question a sympathy trade has to answer is whether the peer moves more than its sector, not merely whether it moves.
Peers always move together to some extent. Stocks in one industry share customers, costs and investors, so on an ordinary day they already close in the same direction far more often than not. The correlation page explains how that everyday co-movement is measured. A sympathy effect only exists if an earnings day produces more of it than an ordinary day does.
The sample used here
Five leaders, each with named peers and a fund. NVIDIA with AMD, Broadcom, Micron, Qualcomm, Marvell and Intel, against the iShares Semiconductor ETF (SOXX). Micron with Western Digital, Seagate, Applied Materials and Lam Research, also against SOXX. FedEx with UPS, Expeditors and C.H. Robinson, against the iShares Transportation ETF (IYT). Nike with UAA, Lululemon, Deckers and VF, against the Consumer Discretionary Select Sector SPDR (XLY). Walmart with Target, Costco, Dollar General, Dollar Tree and Kroger, against the SPDR S&P Retail ETF (XRT). We chose the lists, and every company on them is still listed today.
Dates from the companies’ own releases. Each earnings date is the time the company filed its results release with the SEC on Form 8-K under Item 2.02. A release accepted at or after 4:00 p.m. Eastern counts on the next session; one accepted before 9:30 a.m. counts that day. Where a company filed more than one results 8-K within 40 days, the one whose reaction session traded the most shares is used. On 289 of the 292 reaction sessions, the leader traded more shares than the session before.
A peer with its own results that day is dropped. 6 peer moves fell on the peer’s own reaction session and are left out, leaving 1,281. Moves are close to close, so a release after the bell lands in the next day’s number.
A worked example
NVIDIA, Thursday 27 August 2026. NVIDIA’s results 8-K was accepted at 4:21 p.m. Eastern on Wednesday 26 August. The stock closed at $209.66 that day and at $227.98 on the 27th, a gain of 8.74%. SOXX went from $515.40 to $525.43, up 1.95%.
The six peers split three and three. Broadcom rose 4.49%, from $355.59 to $371.54. Intel rose 4.36%, from $88.24 to $92.09. Qualcomm gained 0.65%, from $163.72 to $164.78. Micron fell 0.32%, from $938.40 to $935.39. AMD fell 0.89%, from $480.93 to $476.67, and Marvell fell 1.49%, from $245.11 to $241.45.
The arithmetic of a sympathy buy. A trader who bought $10,000 of each of the six peers at the 26 August close held $60,000. At the next close the six positions were worth about $60,680, a gain of roughly $680, or 1.13%, on a day the leader rose 8.74%. The same $60,000 in SOXX would have gained about $1,168, or 1.95%.
The original data
Peers followed no more often than on an ordinary day. On the 292 reaction sessions, the peers closed in the leader’s direction on 866 of 1,281 occasions, 67.6%. On ordinary sessions over the same years, with no results from either company, the same pairs closed in the same direction on 54,318 of 78,309 occasions, 69.4%. The two-sided binomial test gives p = 0.17: an earnings day did not line the peers up more than an ordinary day. Every peer move is in the sympathy play file, and the release times are in the earnings release dates file.
Big leader moves pulled peers the same way, but only a little. On the 132 sessions when the leader moved 5% or more, 444 of 584 peer moves went the same way, 76.0% (p < 0.001 against the 69.4% base). Across those 584 peer moves, the median leader move was 8.22% and the median peer move 1.43% in the leader’s direction, and the median peer-to-leader ratio was 0.16, so a typical peer moved about a sixth as far. The sector fund moved a median 1.29% the same way.
Peers did not beat their fund. Measured against the sector fund, peers outperformed in the leader’s direction 664 times out of 1,281, 51.8%, against 50.6% on ordinary days (p = 0.39). On the 5%-plus days it was 52.6% (p = 0.36). The extra move a sympathy trade is looking for was about as common as it is on any day.
Big days without earnings looked different. When a leader moved 5% or more on an ordinary session, peers followed 2,627 of 2,835 times, 92.7%, with a median ratio of 0.55. Those are mostly days when the whole market moved. An earnings move is mostly about one company, which is why so little of it reached the peers.
The leaders were not alike
Walmart’s peers followed more than usual. On Walmart’s 59 reaction sessions, peers went the same way 72.2% of the time, against 65.2% on ordinary days (p = 0.014).
FedEx’s peers followed less. On FedEx’s 58 reaction sessions, the share was 61.5%, against 71.9% on ordinary days (p = 0.003). NVIDIA’s peers came in at 65.2% against 69.8% (p = 0.064), Micron’s at 72.8% against 72.2% (p = 0.88) and Nike’s at 64.9% against 69.1% (p = 0.18).
The next session undid nothing and added nothing. After the 5%-plus days, 307 of 584 peer moves, 52.6%, continued in the leader’s direction the following session, against 49.6% on ordinary days (p = 0.16). A sympathy move that has not happened by the close did not reliably happen the next day.
When it fails
The peers go the other way. On 29 June 2018 Nike rose 11.13% after its results, and all four peers fell: UAA 3.97%, Deckers 2.69%, VF 0.09% and Lululemon 0.07%. On 23 May 2024 NVIDIA rose 9.32%, while AMD fell 3.08% and Intel fell 4.26%. Across the 584 peer moves on 5%-plus days, 140 went against the leader.
The peer’s own news was different. The leader’s quarter can be good because it took business from the peer. A read-across assumes the two companies share a fate, and on a results day that is the thing in doubt.
The fund was the better trade. In the worked example, six peers bought equally made about 1.13% while the fund made 1.95%. A sympathy position that moves only as much as its sector is sector exposure with extra single-stock risk.
One sample, chosen by us. Five leaders, 22 peers, all survivors, from 2012 on. A different list of peers would give different counts, and small companies with thin trading are not in it.
Related
The earnings report page covers the release that starts every sympathy move and why the price reacts to the surprise rather than the level. Correlation explains the everyday co-movement that any sympathy effect has to beat. And the sector ETF page covers the funds used here as the yardstick for each group.
Before I trade a sympathy move, I check the sector fund first. If the peer is only doing what the whole group is doing, I am not trading the news, I am trading the sector, and I size it that way.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.