Research Blog

The Power of Corporate Event Clusters

A look at Disney's superhero stock increase

Observing information pre-event, during the event and post-event closely in relationship to one another is critical to understand how it could impact your trading and risk strategies. Let’s take a recent example of a stock you may recognize: Disney (NYSE: DIS).

As Figure 1 shows, Disney reported 3 movie releases, Q2 earnings date, Q2 earnings call, SEC filing date and presented at an investor conference all within a three week period. This cluster lead to a lot of volatility in Disney's stock and accounted for the highest price ever.

Figure 1: Corporate events for DIS ticker April 11-May 9
as seen in Wall Street Horizon Enchilada application

If you traded on the events that were visible on April 1st, you would have seen a 24.3% increase on the peak day. Figure 2 reinforces that capitalizing on event clusters like Disney can make the difference in generating a strong return or even to help avoid risk.

Figure 2: Capitalizing on event clusters like DIS can help your trading and risk strategies

Recent independent academic studies have shown that the patterns around corporate events generate volatility, and these findings are becoming more apparent as Wall Street Horizon identifies event clusters. Using Enchilada, Wall Street Horizon's online application to identify corporate events ahead of time is essential.