New Stock Market Predictor Beats Historical Average, Boosts Portfolio Returns
The researchers looked at how moving averages can predict stock market returns. They found that using daily prices to calculate moving averages can predict stock market movements better than using monthly prices. The best predictions were made within the most recent 10 days, and the accuracy decreased after 20 days. Overall, the strategy based on short-term moving averages performed better than the historical average benchmark, even when considering transaction costs.