The Korean Journal of Applied Statistics (응용통계연구)

The Korean Statistical Society (한국통계학회)
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Parrondo Paradox and Stock Investment

  • Received : 2012.02.21
  • Accepted : 2012.06.30
  • Published : 2012.08.31
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Abstract

Parrondo paradox is a counter-intuitive phenomenon where two losing games can be combined to win or two winning games can be combined to lose. When we trade stocks with a history-dependent Parrondo game rule (where we buy and sell stocks based on recent investment outcomes) we found Parrondo paradox in stock trading. Using stock data of the KRX from 2008 to 2010, we analyzed the Parrondo paradoxical cases in the Korean stock market.

Keywords

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