New method predicts stock returns more accurately, leading to higher profits.
A new method for predicting stock returns has been developed, which is more accurate than previous methods. By combining different variables in a unique way, this method reduces errors in the predictions, leading to better investment strategies. The results show that this new approach generates higher profits and performs better than existing methods, even with lower costs. Additionally, a three-factor model based on this method outperforms other models in predicting stock returns.