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Record W3122412705

Evaluating Asset Pricing Models using Micro Portfolios as Test Assets

2014· article· en· W3122412705 on OpenAlexaffabout
Laurent Barras

Bibliographic record

VenueSSRN Electronic Journal · 2014
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicFinancial Markets and Investment Strategies
Canadian institutionsMcGill University
Fundersnot available
KeywordsCapital asset pricing modelFinancial economicsMarket liquidityTest (biology)EconomicsFinance
DOInot available

Abstract

fetched live from OpenAlex

Asset pricing models are traditionally evaluated on a set of diversified size/Bookto-Market portfolios. However, the recent literature shows that this approach may have only limited ability to distinguish between the wide variety of models that researchers can choose from. To address this issue, this paper introduces a new cross-section of test assets dubbed micro portfolios. Containing only a few stocks, these portfolios help preserve dispersion of betas across the risk factors that drive returns. This information, which is obscured in diversified portfolios, is critical to improving the evaluation of competing models. The empirical evidence sheds new light on the strengths and weaknesses of the conditional, human capital, and liquidity-based CAPMs and shows that they outperform the standard CAPM along several dimensions that would be largely unnoticed otherwise. ∗Desautels Faculty of Management, McGill University, Montreal. E-mail: laurent.barras@mcgill.ca. Phone:+15143988862. I thank Sebastien Betermier, Julien Cujean, Alexandre Jeanneret, Aytek Malkhozov, Olivier Scaillet, Sergei Sarkissian, Akiko Watanabe, Russ Wermers, as well as seminar participants at the 2012 CIRPEE Applied Financial Time Series Conference, the 2012 meeting of the Institute for Mathematical Finance, the 2012 meeting of the French Finance Association, the 2013 meeting of the Northern Finance Association, the Universities of Geneva, Laval, and Queen’s for their comments. I also thank the Social Sciences and Humanities Research Council of Canada (SSHRC) and the Institute for Mathematical Finance (IFM2) for their financial support.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame machine prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.

metaresearch head score (Codex)0.006
metaresearch head score (Gemma)0.020
Version: metacan-v3-hybrid-931329e0061cValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: none
GenreCandidate signal: Methods · Consensus signal: none
Teacher disagreement score0.006
Threshold uncertainty score0.030

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0060.020
Meta-epidemiology (narrow)0.0010.000
Meta-epidemiology (broad)0.0010.001
Bibliometrics0.0020.001
Science and technology studies0.0000.001
Scholarly communication0.0030.002
Open science0.0010.001
Research integrity0.0010.001
Insufficient payload (model declined to judge)0.0010.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.051
GPT teacher head0.282
Teacher spread0.230 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.

The models applied no category: nothing in the taxonomy fit this work.
Study designTheoretical or conceptual
Domainnot available
GenreMethods

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations0
Published2014
Admission routes2
Has abstractyes

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