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What Do We Learn from Daily Leaders and Laggards in Stock Investment? Do They Help Outperform the Market Average?

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  • Doh-Khul Kim
  • Sung-Min Kim

Abstract

Investors generally believe that rising stocks are more likely to maintain their trend and rise going forward, whereas the losing stocks look more price attractive. This belief can lead the investors to expect that they can outperform the average market by trading the stocks purely based on the price movements. However, this research finds that this simple trading strategy does not effectively outperform the market. Nonetheless, we find five sectors of rising stocks and three sectors of declining stocks that outperform the average market in this limited study.

Suggested Citation

  • Doh-Khul Kim & Sung-Min Kim, 2022. "What Do We Learn from Daily Leaders and Laggards in Stock Investment? Do They Help Outperform the Market Average?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(2), pages 1-44, February.
    • Handle: RePEc:ibn:ijefaa:v:14:y:2022:i:2:p:44
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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