This is a summary of links featured on Quantocracy on Friday, 01/05/2024. To see our most recent links, visit the Quant Mashup. Read on readers!
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Why Do US Stocks Outperform EM and EAFE Regions? [Quantpedia]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 doesnt guarantee identical outcomes
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Crowded Trades Increase Crash Risks [Alpha Architect]Arbitrageurs keep markets efficient by moving prices to reflect their fundamental values. However, anomalies can persist because of limits to arbitragethe costs and risks of shorting. The costs and risks of shorting, however, are not the only risks that arbitrageurs face. The publication of research on anomalies in asset pricing models has led to a dramatic increase in factor-based investment