The Divergence Cyclicality
Economics Policy Journal, 2010
Posted: 10 Apr 2011
Date Written: August 15, 2010
Divergence is an understudied subject loosely defined as an unpredictable random error. The classification of divergences as small or large is also at the heart of efficient or inefficient market theory debate. This paper explains how divergence is cyclical and can be quantified and used as a predictive model.
Keywords: divergence, cyclicality, relative performance, rate of change, assets, rank, distribution
JEL Classification: G10
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