Using Confirmation Timing for Trading Signals
Wall Street Horizon is now advancing its research with new intelligence into what earnings date has been confirmed and when, providing the most insight available into the full quarterly earnings window. This paper explores how the timing of a confirmation date telegraphs information to the market – focusing on company implications when the date occurs outside of its typical range.
Confirmation Timing uses historical data to project an expected confirmation date and the normal range that enables the identification of:
- Companies that have not yet confirmed an earnings date and are materially late compared to their historical trends/behaviors.
- Announced earnings dates in which the Confirmation Timing is materially earlier or later than the company’s historical average of the same quarter.
Wall Street Horizon findings show there is valuable information to be gained by analyzing Confirmation Timing events and has seen that firms reporting earlier than usual exhibit positive abnormal returns. Likewise, companies that confirm later than average typically exhibit negative abnormal returns. Discretionary investors and hedge funds can use confirmation date timing anomalies as signals of upcoming stock-specific news. Quantitative investors can factor Confirmation Timing into their models when designing forward-looking efficient portfolios and academics will be primed to test the data. By factoring in confirmation dates at an earlier part of the earnings timeline, traders and investors can have an advanced look at how a company is performing.
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