= Low-volatility anomaly
{wiki=Low-volatility_anomaly}
The low-volatility anomaly refers to a paradox observed in financial markets where stocks or assets with lower volatility (i.e., less price fluctuation) tend to outperform their higher-volatility counterparts on a risk-adjusted basis. This runs counter to traditional finance theories, particularly the Capital Asset Pricing Model (CAPM), which posits that higher risk (volatility) should be associated with higher expected returns.
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