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Bridge over ocean
1 March 2011 Financial Analysts Journal Volume 67, Issue 2

Are You Trading Predictably?

  1. Steven L. Heston
  2. Robert A. Korajczyk
  3. Ronnie Sadka
  4. Lewis D. Thorson

The authors find predictable patterns in stock returns. Stocks whose relative
returns are high in a given half hour today exhibit similar outperformance in
the same half hour on subsequent days. The effect is stronger at both the
beginning and the end of the trading day. These results suggest that
strategically shifting the timing of trades can significantly reduce execution
costs for institutional traders.

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