Stock Trading News

Determining the true value of a company is not always straightforward. Beyond the mainstream methodologies are various unique approaches to valuation, each offering a distinct perspective on a company’s worth. We look at techniques that may not be as widely recognized, but are equally viable in the right context and application. From the classic fundamentals-based […]

Relative valuation, also known as comparable valuation, is a method used to determine the value of different assets including bonds, real estate, and equities. This technique involves comparing the asset in question with other similar assets to derive its value. Let’s look into how relative valuation is applied across different asset types.   Key Takeaways […]

Determining the value in markets is an important part of investing and trading. To understand how to determine value, we’ll cover several key concepts and principles, including fair value, intrinsic value, market price, expected value, opportunity cost, and risk premium. These concepts will then be framed in the context of valuation risk, real versus nominal […]

Dividend policy refers to the guidelines a company uses to decide how much of its earnings it will pay out to shareholders in the form of dividends. Companies have a range of dividend policies to choose from, and the choice depends on a multitude of factors. The selection of a dividend policy has a significant […]

Emerging market equities are a popular option for traders and investors, given their higher potential. Known for its potential to offer higher returns compared to developed markets, the expected premium for investing in emerging versus developed equity markets is usually 1-3% per year. In other words, if you put your money in EM equities, over […]

Though less understood than traditional directional trading strategies, multi-asset volatility arbitrage (MAVA) involves harnessing profiting from volatility in the markets. At its core, multi-asset volatility arbitrage is a strategy that relies on the volatility differentials of various asset classes. Below we look into the details of multi-asset volatility arbitrage, its benefits, risks, and how traders […]

The S&P 500 is a benchmark index, comprising 500 of the largest US publicly traded companies. It represents the performance of the stock market by reporting the risks and returns of the biggest companies. Investors use it as the benchmark of the overall market, to which all other investments are compared. Below we’ll look at […]

The Fama-French three-factor model is a statistical model formulated in 1992 by Eugene Fama and Kenneth French, both then colleagues at the University of Chicago Booth School of Business. Eugene Fama, a 2013 Nobel Memorial Prize in Economic Sciences laureate, designed this model to help predict and understand stock returns. The three factors in this […]

The Carhart four-factor model is an approach to portfolio management that adds an extra dimension to the widely recognized Fama–French three-factor model. First proposed by Mark Carhart, this advanced model integrates a momentum factor into traditional asset pricing of stocks. This approach broadens the analytical parameters, offering a more comprehensive and detailed understanding of market […]

The H-Model is an advanced method of dividend discounting that traders and investors use to value stocks. Unlike more rudimentary models, the H-Model accounts for a gradual change in dividend growth rate, making it more realistic and relevant in many cases.   Key Takeaways – H-Model The H-Model is an advanced dividend discounting method used […]