Connected Stocks via Business Groups

Morteza Aghajanzadeh, Mahdi Heidari, and Mahdi Mohseni

Stock-return comovement rising with common ownership (MFCAP) — Stock-return comovement increases with common ownership across the cross-section of stock pairs.

Abstract

Using daily ownership data from Iran, we show that both direct and indirect common ownership increase stock-return comovement, with business-group affiliation playing the dominant role. The results highlight coordinated trading patterns within groups as a key mechanism linking ownership structure to asset prices.