Market anomaly
A market anomaly (or market inefficiency) in a financial market is a price and/or rate of return distortion that seems to contradict the efficient-market hypothesis.[1][2]
The market anomaly usually relates to:
- Structural factors, such as unfair competition, lack of market transparency, regulatory actions, etc.
- Behavioral biases by economic agents (see behavioral economics)
- Calendar effects, such as the January effect.
There are anomalies in relation to the economic fundamentals of the equity, technical trading rules, and economic calendar events.
Anomalies could be fundamental,[3] technical, or calendar related. Fundamental anomalies include value effect, small-cap effect (low P/E stocks and small cap companies do better than index on an average) and the low-volatility anomaly. Calendar anomalies involve patterns in stock returns from year to year or month to month, while technical anomalies include momentum effect.
References
- ↑ "Investor Home - Anomalies". www.investorhome.com. Retrieved 2017-03-13.
- ↑ "Investor Home - Anomalies". www.investorhome.com. Retrieved 2017-03-13.
- ↑ "Investor Home - Fundamental Anomalies". www.investorhome.com. Retrieved 2017-03-13.
External links
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