In statistical arbitrage strategy, there is a statistical mispricing of one or more assets based on the expected value of these assets. Statistical arbitrage is not without risk; it depends heavily on the ability of market prices to return to a historical or predicted normal. As a trading strategy, statistical arbitrage is a heavily quantitative […]
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A method of determining an asset’s value that takes into account the value of similar assets. In contrast, absolute value looks only at an asset’s intrinsic value and does not compare it to other assets. Calculations that are used to measure the relative value of stocks include the enterprise ratio and price-to-earnings ratio. When value
The absolute return or simply return is a measure of the gain or loss on an investment portfolio expressed as a percentage of invested capital. It can also be defined as the return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage)
Momentum investment strategy is determining positive relationship between a stock’s recent price history and its future price performance – known as the momentum effect – is one of the most heavily researched stock market anomalies. While the jury is still out regarding what causes the momentum effect, studies have shown that buying the stock market’s
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalise upon the imbalance, the profit being the difference between the market prices. Arbitrage is possible when one of three conditions is met: The same asset does not
