I'm working on a project where I want to investigate a momentum strategy of stock returns. I'm forming 10 decile portfolios based on past 12-1 month returns and I want apply a holding period of 12 months. However, I want to do monthly rebalancing of the portfolios. Now I basically take the average of 12 month ahead returns. This way I can figure out how to do the decile10 - decile1 comparisons, but I have issues while correcting for the Fama French risk factors(mktrf smb hml). For example, all my portfolios have low market betas. I think this is because the x month ahead returns don't line up with the particular fama french factors of that month. I have now idea how to solve this. Can somebody please help me with this?
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