Example: Suppose average market return to a stock was 10% for some calendar year, meaning stocks overall were 10% higher at the end of the year than at the beginning, and suppose that stock S had risen 12% in that period. Then stock S's abnormal return was 2%.
Terms related to Abnormal Returns:
- A Beginner's Guide to Economic Indicators
- Do Changes in Stock Prices Cause Recessions?
- Why Does a Stock Go Down in Price When There is a Big Sell Off?
Books on Abnormal Returns: