Trading volume changes drive stock price reversals in Korean market.
The study looked at how changes in trading volume affect short-term stock price movements in the Korean market. They found that after 2000, stock prices tend to revert back to their average levels. This reversion is less pronounced when trading volume changes are not considered. The relationship between stock returns and trading volume changes is important for understanding market efficiency. The findings suggest that monitoring trading volume changes can help investors make better decisions and avoid misallocating assets.