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Wang, Y., Xiao, B., and Li, X. “DeterminantS of Analyst Following-Empirical Evidence From China.” South China Journal of Economics, 10:88-100. 2012. (in Chinese).

has been cited by the following article:

Article

R2: Information or Noise?

1School of Securities and Futures, Southwestern University of Finance and Economics, Sichuan, China


Journal of Finance and Economics. 2016, Vol. 4 No. 1, 21-29
DOI: 10.12691/jfe-4-1-3
Copyright © 2016 Science and Education Publishing

Cite this paper:
Yugang Yin, Wei Chen, Fei Yu, Dongju Chen. R2: Information or Noise?. Journal of Finance and Economics. 2016; 4(1):21-29. doi: 10.12691/jfe-4-1-3.

Correspondence to: Yugang  Yin, School of Securities and Futures, Southwestern University of Finance and Economics, Sichuan, China. Email: yugang_yin@hotmail.com

Abstract

Whether lower stock price synchronicity reflects information or noise does not have a conclusive answer yet. From the perspective of analyst following in , our empirical study reveals that, the stock price synchronicity which star analysts following is lower than that of non-star analysts, but star analysts do not own more private information about the stocks from the view of earnings forecast accuracy. Investors tend to overreact to the star analysts recommendations, and lower stock price synchronicity is due to noise but not private information revealed in these stocks. So the lower price synchronicity means noise.

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