Abstract
In this paper, we find that high price stocks show significantly higher Sharpe Ratios than low price stocks. Also, price as an investment style seems to be especially beneficial when applied in a multi investment style setting, reducing portfolio standard deviations of returns while potentially adding additional alpha. Conducting several robustness tests, the findings stay valid to a large extent, revealing interesting links to major investment strategies like size and momentum. Presenting and discussing several (unique) characteristics of high-priced stocks from an investor’s perspective, we offer diverse arguments why it makes perfectly sense that high-priced stocks outperform low-priced stocks, at the same time showing less sensitivity to market movements and lower volatility of returns.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
