Date of Award
Master of Science (MS)
Economics and Finance
My research focuses on stock returns around term elections. I will be looking at the 50 most held stocks of congressmen, and taking the returns of these stocks against the market average during election season. I examine if there are Cumulative Abnormal Returns (CARs) that can be realized as a result of information about the elections. I want to find any possible trading strategy that investors could use to obtain returns that are in excess of the market average. I am attempting to discover how the market behaves when election season is occurring. This information could prove to be very crucial in helping to understand behavior of stock returns. Although I am only analyzing elections that occur every two years, if the returns prove to be large enough, then it would prove to be very worthwhile to employ a strategy to capture the gains. With the unpredictability of the stock market, any predictive behavior helps to further understand what could happen. I obtained my portfolio of stocks from the 50 most held stocks by congressmen. These data are open source. The data available is from 2005-2015. From this data I will be analyzing the elections in the years 2006, 2008, 2010, 2012, and 2014.
After obtaining these results, I will then run a regression on the political party that owns each stock against the CAR. By doing so I hope to find out if stocks held by the winning party exhibit abnormal behavior. This implies the following question: Do congressmen have an influence upon the stock values of companies they have stock in? I expect the results to show significant returns for the stocks held by congressmen. I believe that the stocks held by the winning party will exhibit high returns.
Brown, Tyler, "Do Congressmen really drive CARs?" (2018). All Graduate Plan B and other Reports. 1265.
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