Sentences with phrase «explanations for mean reversion»
The last part of the paper discusses two possible explanations for mean reversion: time varying required returns, and slowly - decaying «price fads» that cause stock prices to deviate from fundamental values for periods of several years.
https://papers.ssrn.com/ Not exact matches
Most of the explanations we have discussed for the rise in the CAPE ratio are inherently temporary and are subject to the risk of mean reversion The CAPE naysayers tend to focus on the reasons why a high CAPE ratio can support a high return and tend to ignore the reasons this may not be the case.