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Cumulative Abnormal Return

Measure abnormal stock performance around corporate events using event study methodology. Calculate AR, CAR, and BHAR with the market model.

Market Model Parameters

Estimated from estimation window using OLS regression

Intercept (daily)

Market sensitivity

Daily Returns

Enter as decimals (e.g. 0.02 = 2%) or percentages

Input as:
Day
Event?
Stock Ret. (R_i)
Market Ret. (R_m)
AR

💡 Quick Load Example Data

Load a pre-filled earnings announcement example to see how CAR works.

CAR (Window)
cumulative abnormal return
Signal
Not Calculated
AR on Event Day
day 0 abnormal return
Total Days
in event window
Avg Daily AR
mean abnormal return
BHAR
buy-and-hold AR

Formulas & Methodology

Expected Return

E[R_it] = α + β × R_mt

Market model: OLS-estimated α and β from estimation window.

Abnormal Return

AR_t = R_it − E[R_it]

Actual return minus the expected (normal) return for each day.

Cumulative AR

CAR = Σ AR_t

Sum of all abnormal returns across the event window.

Strong Positive
CAR > +2%
Weak Positive
0% < CAR ≤ 2%
Weak Negative
-2% ≤ CAR < 0%
Strong Negative
CAR < -2%