Improving Price Reversal Strategies With ‘Residual Reversals’
Price reversal strategies, which buy stocks that have recently outperformed and short stocks that have recently underperformed, aren’t supposed to work. In an efficient market, prices reflect all available information and any investment based strictly on past performance shouldn’t be able to consistently outperform the market. But price reversal strategies do outperform, whether this is because they take advantage of investors’ non-rational tendency to overreact to new information or because price reversal strategies are getting a premium for . . .
This content is exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here
If you are subscribed and having an account error please clear cache and then cookies if that does not work email email@example.com and we will get back to you as quick as humanly possible