Price Momentum

Price Momentum measures the rate of change of a stock price and thus trend strength. Price momentum may refer to a stock that outperforms its industry or market for a period of time.

Price Momentum

Price Momentum measures the rate of change of a stock price and thus trend strength.

 

Price Momentum Interpretation

Price momentum may refer to a stock that outperforms its industry or market for a period of time.  Alternatively, price momentum may refer to a stock's relative performance compared to its own recent historical performance.



One price momentum strategy states that: 

"Stocks that had relatively high returns over the past three to twelve months should return to investors above average returns over the next three to twelve months."

from "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency"  by Narasimhan Jegadeesh and Sheridan Titman, The Journal of Finance, March 1993.



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