Abstract
This paper examines whether there is an existence of a short-term contrarian profits at the firms in Kuwait Stock Exchange (KSX). The role of return seasonality is also investigated. This article documents strong evidence for the short-term contrarian strategy in the Kuwait stock exchange. The result of this study finds that the short-term contrarian profits for the Kuwait market can’t be explained by January effect. In spite of whether losers are smaller or larger than winners, there are short-term abnormal profits. Finally, this paper shows a strong symmetry between the winner and loser portfolios.
Highlights
In their Japanese study of short-term contrarian strategy, Chang, McLeavey and Rhee (1995) comprehensively investigate the performances of the short-term abnormal returns to contrarian investment strategies
By using the Chang, McLeavey and Rhee’s (1995) methodology, this paper aims to investigate whether there is a short-term returns to contrarian investment strategy applied to the Kuwait Stock Exchange (KSX)
This paper reveals strong evidence on the short-term contrarian profits in the Kuwait firm market
Summary
In their Japanese study of short-term contrarian strategy, Chang, McLeavey and Rhee (1995) comprehensively investigate the performances of the short-term abnormal returns to contrarian investment strategies. They provide empirical evidence on the short-term contrarian profits in the Japanese stock. By using the Chang, McLeavey and Rhee’s (1995) methodology, this paper aims to investigate whether there is a short-term returns to contrarian investment strategy applied to the Kuwait Stock Exchange (KSX).
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