Why Do US Stocks Outperform EM and EAFE Regions?

5.January 2024

Investing in emerging markets (EM) or developed markets (DM) outside of the United States tends to follow cyclical trends. At times, it becomes popular and crowded to focus solely on U.S. stocks, while in other periods, the trend shifts to favor everything except U.S. equities. This inclination often relies on historical and past performance data, although it doesn’t guarantee identical outcomes in the future. But what drives these periods of popularity? When do U.S. markets outperform Emerging Markets or other Developed Markets? When do large-cap stocks outperform small-cap stocks, and when do growth stocks outperform value stocks? Are those ebbs and flows in the performance of major thematic investments somehow interlinked, and can we uncover some insights into why this occurs? Those are the questions we will try to answer in the following analysis.

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Top Ten Blog Posts on Quantpedia in 2023

27.December 2023

As usual, at this time of the year, let us do a short recapitulation of posts on our blog in the previous 12 months. We have published over 75 short analyses of academic papers and our own research articles on this blog in 2023. We want to use this opportunity to summarize 10 of them, which were the most popular (based on the Google Analytics tool). The top 10 is really diverse; maybe you will be able to find something you have not read yet …

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What’s the FED Perspective on Inflation Surprises and Equity Returns

21.December 2023

The period of high inflation in the 1970s prompted researchers to carefully examine the relationship between inflation and stock returns and to look for ways to avoid unexpected inflation. The year 2022 brought back inflationary pressures to the U.S. economy not seen in more than 40 years, and this has spurred new efforts to answer long-standing questions about inflation and asset prices. Authors from the Board of Governors of the Federal Reserve System (2023) bring a fresh perspective on this topic, and their paper allows us to get a FED insider’s view on the ageless question of how inflation affects equity returns.

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Cyber Risk and the Cross-Section of Stock Returns

12.December 2023

In today’s fast world, where information flows freely and transactions happen at the speed of light, the significance of cybersecurity cannot be overstated. But it’s no longer just a concern for IT professionals or tech enthusiasts. The specter of well-documented hacks and phishing incidents casts a long shadow over investors, acting as powerful illustrations of how security breaches, vulnerabilities, and cyber threats can reverberate through financial markets. In this blog post, we’ll delve into the intricate relationship between cybersecurity risk and stock performance, uncovering how these digital hazards can influence financial markets.

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Quantpedia in November 2023

8.December 2023

Hello all,

What have we accomplished in the last month?

– A new Alpha Analysis report
– 13 new Quantpedia Premium strategies have been added to our database
– 11 new related research papers have been included in existing Premium strategies during the last month
– Additionally, we have produced 8 new backtests written in QuantConnect code
– 4 new blog posts that you may find interesting have been published on our Quantpedia blog in the previous month

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What Can We Extract From the Financial Influencers’ Advice?

1.December 2023

Social media are often the main and primary choice of information in almost every area of our lives, and they also influence the financial decisions of retail traders and investors. A lot of people give opinions anywhere on the Internet; some are respected, others are disrespected, some are more well-known, and others obscure. But the power of those people, financial influencers, as a group, is substantial as they create the market sentiment. But what’s the real value of their advice? Can we extract useful information from their opinions?

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