Title: When Charts Help and Mislead: Visual Peer Effects in Stock Markets

Speaker: Jie Cao, Professor of Finance, The Hong Kong Polytechnic University

Time: 10:00-11:30, September 11th, 2026 (Friday)

Venue: Room 1008, Mingde Business Building (Zhongguancun Campus)

Language: English/Chinese

ABSTRACT:

This paper documents a visual peer effect based on similarity in stock price charts. We identify visually similar peers for each firm and find that their returns negatively predict the focal firm’s next-month return. This effect appears only among visually similar peers that have no economic links to the focal firm, suggesting that visual similarity creates spurious peer categories. By contrast, when visual similarity coincides with economic links, visual salience weakens the delayed incorporation of peer information and attenuates lead-lag return predictability based on economic underreaction. Our findings suggest that visual similarity has a dual role in stock markets: it helps investors process relevant peer information when visual and economic links overlap, but misleads them when salient price patterns create nonfundamental peer categories.