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Record W7071742154

Three Essays on Financial Markets

2024· dissertation· en· W7071742154 on OpenAlexaff

Bibliographic record

VenueMacSphere (McMaster University) · 2024
Typedissertation
Languageen
FieldEconomics, Econometrics and Finance
TopicMarket Dynamics and Volatility
Canadian institutionsMcMaster University
Fundersnot available
KeywordsFutures contractCapital asset pricing modelPortfolioRisk premiumFinancial riskHedgeValuation (finance)Financial marketStock (firearms)Rational pricing
DOInot available

Abstract

fetched live from OpenAlex

This thesis comprises three distinct but interconnected studies in the field of financial markets, each exploring different facets of financial markets: asset pricing, sustainable investment and behavioral finance. The first paper derives stock returns for firms producing non-renewable commodities employing the investment-based asset pricing approach. By identifying the appropriate time-varying discount rate the investment-based approach allows an alternative test of the Hotelling Valuation Principle. The empirical results support the principle and enable predicting returns from sorting firms into quintiles by expected return, producing a 16-20 percent realized difference between top and bottom quintile. The return differences cannot be explained by standard risk factors or a commodity-specific factor, suggesting that an important risk factor is still missing from standard models. The approach permits cost-of-capital estimation that circumvents identifying systematic risk factors. The second paper examines whether the carbon pricing risk factor is priced in the cross-section of commodity futures. Analyzing unexpected pricing shocks in carbon emission allowances, it is shown that carbon pricing risk carries a significant positive risk premium in commodity markets. The study reveals that commodity sensitivities to carbon pricing risk vary, influenced by commodity-specific characteristics such as basis and hedging pressure. Additionally, a portfolio of commodity futures constructed based on carbon pricing beta offers superior out-of-sample hedging performance for climate change risk compared to hedge portfolios constructed from equities or ETFs. The third paper investigates the accuracy of target price forecasts made by sell-side analysts, employing machine learning approaches to predict the forecasts’ accuracy. Using a dataset of target price forecasts for U.S. listed companies from 1999 to 2021, ensemble methods incorporating market-level, firm-level, and analyst-level information are used to predict target price accuracy in terms of errors and achievement. A long-short portfolio constructed based on these predictions significantly outperforms the benchmark in terms of cumulative return and Sharpe ratio.

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)0.002
metaresearch head score (Gemma)0.012
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: Theoretical or conceptual
GenreCandidate signal: Empirical · Consensus signal: none
Teacher disagreement score0.023
Threshold uncertainty score0.077

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0020.012
Meta-epidemiology (narrow)0.0010.000
Meta-epidemiology (broad)0.0010.001
Bibliometrics0.0030.003
Science and technology studies0.0020.006
Scholarly communication0.0060.008
Open science0.0010.002
Research integrity0.0040.005
Insufficient payload (model declined to judge)0.0230.004

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 head0.014
GPT teacher head0.190
Teacher spread0.176 · 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
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

Citations0
Published2024
Admission routes1
Has abstractyes

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