Momentum and Mean Reversion

In this lesson, we’ll explore the critical question: Do past returns predict future ones? This topic challenges the weak-form market efficiency theory. We’ll look at market efficiency theories, focusing on momentum in trading and how it’s affected by past and present trends. Key studies by Jegadeesh and Titman, as well as Debondt and Thaler, will be highlighted to understand momentum and mean reversion in the market.