The Power of Events: Exploring the Relationship Between Revenue, Stock Prices, and Market Expectations: A Behavioral Finance and Event Analysis of 12 American Companies Listed on Nasdaq and NYSE”

Alexander Bordinggaard Marcussen

Student thesis: Diploma thesis

Abstract

Behavioral finance and event analysis are key areas of financial analysis that study how human behavior and emotions influence financial decisions and the impact of certain events on financial markets. The purpose of this research project is to analyze the relationship between revenues, stock prices, and market expectations for twelve U.S. companies listed on NASDAQ and NYSE using techniques from behavioral economics and event analysis. The research is based on historical data from twelve selected companies listed on NASDAQ and NYSE that have the most available data, including revenues, stock prices, and financial analyst expectations. Nineteen quarters of data are collected, spanning a specific estimation period. Statistical techniques such as regression analysis and descriptive statistics are used to analyze the data and identify patterns and correlations. The main objective of the study is to find out how market expectations, stock price estimations, and certain events, such as earnings announcements, affect stock prices. Stock prices are assumed to be affected by earnings and market expectations and events, possibly having an impact on stock prices and market expectations. Through the analysis of historical data, correlations between market conditions, earnings, and stock expectations will be identified. The research will also contribute to the field of behavioral economics and event analysis by providing insights into financial behavior related to specific events and the estimation period. The results of this research will provide insight into how market expectations, earnings, and specific events affect stock prices and how investors and analysts can use these insights to make informed investment decisions. The importance of this research lies in the potential implications for investors and analysts. By understanding how human behavior and emotions influence financial decisions and the impact certain events have on stock prices, investors and analysts can make more informed investment decisions. The results of this research can also improve understanding of market dynamics and provide valuable insights for financial practitioners. In summary, this research project aims to analyze the relationship between revenues, stock prices, and market expectations for 12 U.S. companies listed on NASDAQ and NYSE using behavioral economics and event analysis techniques. The research will rely on historical data, and statistical techniques will be used to analyze the data and identify patterns and correlations. It is expected that the results of this research will contribute to the field of behavioral economics and event analysis and provide investors and analysts with insights to make informed investment decisions and improve their understanding of market dynamics.

EducationsGraduate Diploma in Finance, (Diploma Programme) Final Thesis
LanguageEnglish
Publication date2023
Number of pages73
SupervisorsJimmy Martínez-Correa