Fuzzy returns lead to more stable stock market predictions.
The article explores how different time periods and sample sizes affect the accuracy of estimating betas in the Capital Asset Pricing Model. By using fuzzy set theory, the researchers linked returns with volatility to better analyze the impact of return intervals. They found that fuzzy beta estimates are more stable than traditional methods when dealing with outliers caused by market changes. The study's results, based on French stocks, suggest that fuzzy beta estimates are more reliable in varying conditions.