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Real and spurious long-memory properties of stock-market data
Journal article   Peer reviewed

Real and spurious long-memory properties of stock-market data

I. N. Lobato and N. E. Savin
Journal of business & economic statistics, Vol.16(3), pp.261-268
07/01/1998
DOI: 10.1080/07350015.1998.10524760

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Abstract

We test for the presence of long memory in daily stock returns and their squares using a robust semiparametric procedure of Lobato and Robinson. Spurious results can be produced by nonstationarity and aggregation. We address these problems by analyzing subperiods of returns and using individual stocks. The test results show no evidence of long memory in the returns. By contrast, there is strong evidence in the squared returns.
Lagrange multiplier test Long-range dependence Semiparametric procedure

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