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|Subject: CAPS results study||Date: 5/29/2010 8:06 PM|
|Author: tradertal||Number: 7501 of 9107|
I've been wanting to determine whether the CAPS rating is really an effective determinant of performance. I have been gathering together market price data and collecting a database of CAPS ratings for statistical studies. I did a crude study of stock price change YTD vs CAPS rating and found a nice correlation, but unfortunately an INVERSE CORRELATION. It's so perfectly inverse that I almost can't believe it, but I can't see anything wrong with my methods. Here is the average stock price percentage increase year to date vs CAPS rating:
0 (no rating or not in database) - +17.06% - 3739 stocks
1 star - +16.88% - 752 stocks
2 stars - +7.98% - 926 stocks
3 stars - +3.63% - 959 stocks
4 stars - -0.04% - 984 stocks
5 stars - -3.8% - 843 stocks
The study is based on the current CAPS rating, not the rating in effect at the start of the period, so this would affect results a bit.
If anyone has any other similar or conflicting results, I'd love to hear about them.
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