What Drives Stock Prices?
- By Sam van de Schootbrugge
- 5 min read
Summary
• A new Review of Financial Studies paper explores how different sources of information influence movements in US stock prices.
• It finds that publicly available firm-specific information is the largest determinant of price fluctuations, but still only accounts for just over a third of the variation in daily returns.
• Noise (31%), privately available firm-specific information (24%) and market-wide information (8%) explain the rest of the variation.
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