Research & Publications Office to host seminar on ‘A Cross-Sectional Decomposition of Firms’ Market Betas’ on 25 June
The talk will be delivered by Prof. Hitesh Doshi, University of Houston
17 June, 2025, Bengaluru: The Office of Research and Publications (R&P) will host a seminar on, ‘A Cross-Sectional Decomposition of Firms’ Market Betas’, to be led by Prof. Hitesh Doshi, University of Houston (Finance & Accounting area), at 12 pm on 25th June 2025.
Abstract: The study proposes a new empirical framework for cross-sectional asset pricing. The framework generalizes and nests the CAPM. The researchers decompose the firm’s traditional CAPM market beta in two components: a negative market beta, which contains the negative correlations between the return of the firm and other firms, and a positive market beta, which contains the positive correlations. The sum of the positive and negative betas is the total market beta, and the researchers expect all three betas to have a positive price of risk. They find that the negative beta, which is the beta component that provides a hedge against the overall market, carries a statistically significant and economically large risk premium of 7.44% per annum. Like the total market beta, the positive beta is not statistically or economically significant. The information contained in the proposed negative and positive betas is economically and intuitively very different from the upside and downside betas in Ang et al. (2006a) and the semibetas of Bollerslev et al. (2022). The estimated price of risk associated with the negative beta is also robust to including other factors and characteristics used in the cross-sectional literature.
Speaker Profile: Dr. Hitesh Doshi is the Bauer Professor of Finance at the C.T. Bauer College of Business, University of Houston. He holds a PhD in Management (Finance) from McGill University. His research focuses on asset pricing, derivatives and credit risk, with publications in top-tier journals including The Review of Financial Studies, The Journal of Finance and Journal of Financial Economics.
Webpage Link: https://www.bauer.uh.edu/hdoshi/
Research & Publications Office to host seminar on ‘A Cross-Sectional Decomposition of Firms’ Market Betas’ on 25 June
The talk will be delivered by Prof. Hitesh Doshi, University of Houston
17 June, 2025, Bengaluru: The Office of Research and Publications (R&P) will host a seminar on, ‘A Cross-Sectional Decomposition of Firms’ Market Betas’, to be led by Prof. Hitesh Doshi, University of Houston (Finance & Accounting area), at 12 pm on 25th June 2025.
Abstract: The study proposes a new empirical framework for cross-sectional asset pricing. The framework generalizes and nests the CAPM. The researchers decompose the firm’s traditional CAPM market beta in two components: a negative market beta, which contains the negative correlations between the return of the firm and other firms, and a positive market beta, which contains the positive correlations. The sum of the positive and negative betas is the total market beta, and the researchers expect all three betas to have a positive price of risk. They find that the negative beta, which is the beta component that provides a hedge against the overall market, carries a statistically significant and economically large risk premium of 7.44% per annum. Like the total market beta, the positive beta is not statistically or economically significant. The information contained in the proposed negative and positive betas is economically and intuitively very different from the upside and downside betas in Ang et al. (2006a) and the semibetas of Bollerslev et al. (2022). The estimated price of risk associated with the negative beta is also robust to including other factors and characteristics used in the cross-sectional literature.
Speaker Profile: Dr. Hitesh Doshi is the Bauer Professor of Finance at the C.T. Bauer College of Business, University of Houston. He holds a PhD in Management (Finance) from McGill University. His research focuses on asset pricing, derivatives and credit risk, with publications in top-tier journals including The Review of Financial Studies, The Journal of Finance and Journal of Financial Economics.
Webpage Link: https://www.bauer.uh.edu/hdoshi/