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Record W3122651913 · doi:10.2308/jfir-51332

Do Analyst Forecasts Vary Too Much?

2015· article· en· W3122651913 on OpenAlexaff
Russell J. Lundholm, Rafael Rogo

Bibliographic record

VenueJournal of Financial Reporting · 2015
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicFinancial Markets and Investment Strategies
Canadian institutionsUniversity of British Columbia
Fundersnot available
KeywordsVolatility (finance)EconometricsEconomicsStock (firearms)Aggregate (composite)Variance (accounting)Financial economicsStock marketAccountingGeography

Abstract

fetched live from OpenAlex

ABSTRACT In this paper we examine the time-series and cross-sectional volatility in analyst forecasts. We derive a bound on the degree of variation in forecasts, analogous to the variance bound literature in finance, and document the frequency and circumstances surrounding violations of this bound. We find that the time-series of individual forecasts are excessively volatile approximately 17 percent of the time, affecting up to 50 percent of the aggregate market value of stocks. We also find that the market-wide frequency of excessively volatile forecasts in a year is positively correlated with aggregate stock market volatility and market sentiment, and is negatively correlated with future aggregate stock returns. We find that the cross-section of analyst forecasts are excessively volatile approximately 8 percent of the time, and observe that excessively volatile forecasts are more common for larger firms. As a precursor to identifying the underlying causes and consequences of excessively volatile forecasts, we describe the time period characteristics, analyst characteristics, and firm characteristics that are associated with these events.

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)0.081
Version: metacan-v3-hybrid-931329e0061cValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Observational · Consensus signal: Observational
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.006
Threshold uncertainty score0.033

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0060.081
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0020.002
Science and technology studies0.0000.001
Scholarly communication0.0030.002
Open science0.0010.001
Research integrity0.0010.001
Insufficient payload (model declined to judge)0.0020.000

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 head0.117
GPT teacher head0.279
Teacher spread0.162 · 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 designObservational
Domainnot available
GenreEmpirical

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

Citations12
Published2015
Admission routes1
Has abstractyes

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