Monitoring Risk Events to Stock Price Changes
Correlation, Not Cause
Another analysis that can help show the effectiveness of the ERM program is by documenting major share price changes in relation to events occurred around the same time (as shown in Figure 10.1). This is not to say that these events caused the price to change but could potentially show some correlation to the subject matter. The events that are recorded are not just events that are related only to a company, but rather impacting the overall market or industry, or events that relate to competitors such as mergers and acquisitions or bankruptcies. Some of the events that happen during the same time of stock price changes and should be recorded in risk profile register ...
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