A short-term investor should buy and sell his investments frequently, while a long-term investor should hold his positions unchanged for a considerable length of time. To implement this idea empirically, i calculate for each institutional investor a measure of how frequently he rotates his positions on all the stocks of his portfolio (churn rate). If we denote the set of companies held by investor i by Q, the churn rate of investor i at quarter t is Array
where Pj,t and Nj,i,t represent the price and the number of shares, respectively, of company j held by institutional investor i at quarter t.
I then use investor churn rates to construct a measure of investor turnover for the firm that measures the investment horizon of institutional shareholders in the firm prior to an acquisition announcement. Denote by S the set of shareholders in company k and by wk,i,t the weight of investor i in the total percentage held by institutional investors at quarter t. The investor turnover of firm k is the weighted average of the total portfolio churn rates of its investors over four quarters: Array
The data is panel data with multiple companies over a time frame of 15 years (2003-2017). I'm having a hard to even start with transforming these formulas into STATA code. Is there anyone who could help me with this? I have attached a small example of my data set below:
File Date | Manager Name | Manager Number | Type Code | Report Date | Prior Report Date | Cusip | Shares Held at End of Qtr | Net Change in Shares Since Prior Report | Stock Name | Industry Code | Share Price, as of FDATE | Shares Outstanding in Millions, as of FDATE |
20030331 | AIM MANAGEMENT GROUP, INC. | 140 | 5 | 20030331 | 20021231 | 13442910 | 3178798 | 616256 | CAMPBELL SOUP CO | 115 | 21 | 410 |
20030331 | ASB CAPITAL MANAGEMENT, INC. | 185 | 5 | 20030331 | 20021231 | 13442910 | 312934 | -300 | CAMPBELL SOUP CO | 115 | 21 | 410 |
20030331 | ADVEST BANK AND TRUST COMPANY | 488 | 1 | 20030331 | 20021231 | 13442910 | 1200 | CAMPBELL SOUP CO | 115 | 21 | 410 |
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