The Secret Behind Stock Prices Falling in Tandem
It’s not particularly surprising when the value of certain stocks fall. Especially during events like the pandemic. Just as some might rise in value when the industries are flourishing. This is called comovement. While this is expected behavior, there are some instances of stock prices falling together more than usual, and researchers always struggle to find the cause of that kind of event.
But, a new research study co-authored by Yale SOM’s Heather Tookes that explores this phenomenon suggests a relationship between margin trading and stock prices falling all at the same time.
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