Analyst Coverage
factor.formula
This factor does not involve a complex calculation formula, but is based on the statistics of analyst coverage. The specific calculation can be referred to the following description:
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The number of analysts who have issued research reports or rating recommendations on the target stock during the specified review period.
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The total number of analysts that can be tracked and that cover the target stock during the specified look-back period.
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Covered Analysts Num / Total Trackable Analysts Num
factor.explanation
Analyst coverage reflects the market's attention to a particular stock. High coverage usually means:
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Higher information transparency: More analyst coverage usually means more research and information disclosure about the stock, reducing information asymmetry.
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Higher market attention: More analyst attention may lead to higher trading activity and liquidity.
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Potential over-attention risk: Too much attention may lead to over-hyping of stocks, with a risk of short-term correction.
Relatively speaking, low coverage may mean:
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Higher information uncertainty: Low analyst attention may mean less information disclosure about the stock, and the market has a lower understanding of it, which may lead to higher uncertainty.
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Undervalued opportunities: There may be value that is overlooked by the market, and with more information disclosure, it may usher in a revaluation of value.
This factor can be used to construct stock selection strategies, such as:
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Reverse strategy: Select stocks with relatively low coverage and bet on undervalued opportunities under information asymmetry.
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Trend strategy: Select stocks with rapidly rising coverage and bet on rising stock prices due to increased market attention.
It should be noted that the effectiveness of this factor may be affected by multiple factors such as market environment and industry characteristics. It should be used in combination with other factors and fully verified in strategy backtesting.