Factor families

Momentum factor

In plain English

Stocks that have been going up recently tend to keep going up; the ones falling tend to keep falling — for medium horizons.

How it works

Jegadeesh-Titman 1993: 12-month-minus-1-month price return is one of the most replicated anomalies in finance. We use 12m−1m return + revenue acceleration. The "minus 1m" part avoids the well-known short-term reversal effect (Jegadeesh 1990). High momentum = recent winner. Low momentum = recent loser.

Where you see this in Framler
Momentum card. "STRONG_MOMENTUM" pattern.
Primary citation
Jegadeesh-Titman 1993, Returns to buying winners and selling losers

Related — Factor families

Quality factor (Novy-Marx)Value factor (Fama-French)PEAD (Post-earnings drift)Accruals signal (Sloan)Short interest (Asquith)Insider flow (Seyhun)

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Momentum factor — Framler glossary | Framler