Event anomalies

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Event anomalies

Occurrences such as earnings surprises or stock splits that seem to present opportunity to generate abnormal returns for those trading on the news.

Event Anomalies

Occurrences that present the opportunity for an abnormal return. For example, a company may announce the hiring of a well-regarded executive as CEO. This could cause the company's stock price to jump temporarily; a shareholder could sell some shares at the artificially high price, generating a higher return than the shareholder expected when he/she bought the stock. See also: Excess return.