Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Researchers Develop Index of Innovative Companies

02.04.2010
Portfolios Based on Index Outperform S&P 500

A study from the USC Marshall Center for Global Innovation co-authored by Gerard Tellis, Professor and Director of the Center and Andreas Eisingerich Assistant Professor at Imperial College London, has developed an index of innovative firms. Portfolios of top firms on this index appear to perform better than the S&P 500 in up markets and almost as well in down markets. The superior performance comes without excessive risk.

“The results suggest that innovation is a valid criterion of portfolio formation, just as the current criteria of size, value, growth, and price,” said Tellis.

The study’s sample is drawn from Fortune’s list of the 300 largest US firms and Business Week’s list of the 100 most innovative firms, between 2004 and 2008. The innovation index is based on five metrics that use objective market data as opposed to polling. All data are collected from public market sources by two independent research assistants under supervision of a statistician.

“Polls suffer from the tyranny of hype” says Tellis, “Names that get early recognition get greater visibility in the press, which accentuates their popularity, leading to a positive cascade in their favor.”

“A crucial aspect of this index is the link between innovation measured on this index and current and future financial performance,” says Tellis.

The superior performance holds not only in current year performance but also in one-year-ahead performance. “The ultimate test of an index is whether it can predict stock market performance a year ahead,” says Eisingerich. For example:

• In the five years between 2004 and 2008, an annual paper investment of $10,000 in a portfolio of top 20 firms in the Index yields a cumulative return that is 46% higher than the S&P 500 for concurrent years

• For one-year-ahead performance the increase in returns is 23% for the top 20 portfolio over the S&P 500

The authors are updating the study to include 2009 and 2010 data and plan to test the performance of the index on real investments.

The full-report and details of the findings are available at the Center’s website (http://www.marshall.usc.edu/cgi/innovation). Details of the method, metrics, & ranking of firms by year are available from the Center at innovation@marshall.usc.edu

Amy Blumenthal | Newswise Science News
Further information:
http://www.usc.edu

More articles from Business and Finance:

nachricht Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik

nachricht RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Explanation for puzzling quantum oscillations has been found

So-called quantum many-body scars allow quantum systems to stay out of equilibrium much longer, explaining experiment | Study published in Nature Physics

Recently, researchers from Harvard and MIT succeeded in trapping a record 53 atoms and individually controlling their quantum state, realizing what is called a...

Im Focus: Dozens of binaries from Milky Way's globular clusters could be detectable by LISA

Next-generation gravitational wave detector in space will complement LIGO on Earth

The historic first detection of gravitational waves from colliding black holes far outside our galaxy opened a new window to understanding the universe. A...

Im Focus: Entangled atoms shine in unison

A team led by Austrian experimental physicist Rainer Blatt has succeeded in characterizing the quantum entanglement of two spatially separated atoms by observing their light emission. This fundamental demonstration could lead to the development of highly sensitive optical gradiometers for the precise measurement of the gravitational field or the earth's magnetic field.

The age of quantum technology has long been heralded. Decades of research into the quantum world have led to the development of methods that make it possible...

Im Focus: Computer-Designed Customized Regenerative Heart Valves

Cardiovascular tissue engineering aims to treat heart disease with prostheses that grow and regenerate. Now, researchers from the University of Zurich, the Technical University Eindhoven and the Charité Berlin have successfully implanted regenerative heart valves, designed with the aid of computer simulations, into sheep for the first time.

Producing living tissue or organs based on human cells is one of the main research fields in regenerative medicine. Tissue engineering, which involves growing...

Im Focus: Light-induced superconductivity under high pressure

A team of scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg investigated optically-induced superconductivity in the alkali-doped fulleride K3C60under high external pressures. This study allowed, on one hand, to uniquely assess the nature of the transient state as a superconducting phase. In addition, it unveiled the possibility to induce superconductivity in K3C60 at temperatures far above the -170 degrees Celsius hypothesized previously, and rather all the way to room temperature. The paper by Cantaluppi et al has been published in Nature Physics.

Unlike ordinary metals, superconductors have the unique capability of transporting electrical currents without any loss. Nowadays, their technological...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Save the date: Forum European Neuroscience – 07-11 July 2018 in Berlin, Germany

02.05.2018 | Event News

Invitation to the upcoming "Current Topics in Bioinformatics: Big Data in Genomics and Medicine"

13.04.2018 | Event News

Unique scope of UV LED technologies and applications presented in Berlin: ICULTA-2018

12.04.2018 | Event News

 
Latest News

Supersonic waves may help electronics beat the heat

18.05.2018 | Power and Electrical Engineering

Keeping a Close Eye on Ice Loss

18.05.2018 | Information Technology

CrowdWater: An App for Flood Research

18.05.2018 | Information Technology

VideoLinks
Science & Research
Overview of more VideoLinks >>>