Trade it: What first day plunge means for 2016

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

After disappointing manufacturing data in China, the Shanghai composite crashed 6.9 percent Monday, its worst daily return since the turmoil last August. The China sell-off hit the S&P 500 by more than 2 percent.

Given the market volatility into the first U.S. trading day of 2016, investors may wonder how much significance the day one return has on the full year's performance.

S&P Dow Jones Indices' Howard Silverblatt analyzed the historical data and found the first trading day of the year had little predictive value on the full year's return. However, the monthly move of January often telegraphed the full year.

He wrote in a note to clients Monday:

"'As January goes, so goes the year" is an old Wall Street saying, which has been correct 72.4 percent of the time. The opening day performance has been less convincing, with the market moving in the same direction for the year, as it did for the first day, 50.6 percent of the time."

Here's the data since 1999.

So investors better hope for a rebound because a down January typically sets a negative tone for investors that lasts the next 11 months.

If stocks in fact follow through Monday's sell-off for the rest of the month, there are ways for investors to protect themselves. Using Kensho, a quantitative analytics tool, CNBC Pro ran the numbers on what does well if the market falls 5 percent in one month.

Here is what we found.

model portfolios
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