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Skewness in Financial Returns: Evidence from the Portuguese Stock Market (in English)

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Author Info
Carlos MACHADO-SANTOS () (UTAD University, Apartado, Portugal)
Ana Cristina FERNANDES () (University of Minho, Braga, Portugal)
Abstract

This paper addresses the issue of symmetry in financial returns. The return distributions of the major stocks traded on the Portuguese market and included in the PSI-20 Index are examined for periods from four to nine years. The results show that the symmetry of the returns is rejected against several alternative distributions. Statistically significant differences between returns below and above the mean are detected, which provides additional evidence of skewness in the return distributions. In addition, as observed in other studies, it is interesting to note that such results are similar to other low-capitalization and low-volume markets, which also exhibit asymmetric return distributions.

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Publisher Info
Article provided by Charles University Prague, Faculty of Social Sciences in its journal Finance a uver - Czech Journal of Economics and Finance.

Volume (Year): 55 (2005)
Issue (Month): 9-10 (September)
Pages: 460-470
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Handle: RePEc:fau:fauart:v:55:y:2005:i:9-10:p:460-470

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Related research
Keywords: stock markets; skewness; financial returns;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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  1. Markowitz, Harry M, 1991. " Foundations of Portfolio Theory," Journal of Finance, American Finance Association, vol. 46(2), pages 469-77, June. [Downloadable!] (restricted)
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  2. Chunhachinda, Pornchai & Dandapani, Krishnan & Hamid, Shahid & Prakash, Arun J., 1997. "Portfolio selection and skewness: Evidence from international stock markets," Journal of Banking & Finance, Elsevier, vol. 21(2), pages 143-167, February. [Downloadable!] (restricted)
  3. Baci, Sidika & Zaman, Asad, 1998. "Effects of skewness and kurtosis on model selection criteria," Economics Letters, Elsevier, vol. 59(1), pages 17-22, April. [Downloadable!] (restricted)
  4. Jean, William H., 1971. "The Extension of Portfolio Analysis to Three or More Parameters," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 6(01), pages 505-515, January. [Downloadable!]
  5. Glosten, L. R. & Jagannathan, R., 1994. "A contingent claim approach to performance evaluation," Journal of Empirical Finance, Elsevier, vol. 1(2), pages 133-160, January. [Downloadable!] (restricted)
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  6. William F. Sharpe, 1965. "Mutual Fund Performance," Journal of Business, University of Chicago Press, vol. 39, pages 119. [Downloadable!]
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