Short-Horizon Empirical Validation of SIRRIPA: Structural Return Constraints and Relative Equity Performance

Read full text
Authors: Rainsy Sam
Cited by: 0

Abstract

This article provides an empirical validation of the Stock Internal Rate of Return Including Price Appreciation (SIRRIPA) using a point-in-time cross-section of U.S. technology stocks. SIRRIPA values are computed as of December 31, 2025 within a unified PPP-based valuation framework and confronted with realized equity performance over the subsequent period from January 1 to February 3, 2026. The analysis shows that higher ex-ante SIRRIPA values are associated with superior relative equity performance ex post, even over a very short horizon of approximately one month. Correlation analysis and portfolio-based tests indicate that SIRRIPA exhibits meaningful rank-ordering power, while traditional valuation multiples fail to do so. These empirical results are consistent with a structural interpretation of market dynamics, in which prices behave as constrained systems subject to return-based convergence forces rather than opinion-driven fluctuations.

Fields of Study & Subjects

Financial Markets and Investment Strategies Financial Reporting and Valuation Research Financial Analysis and Corporate Governance

Publication details

Journal / source
Zenodo (CERN European Organization for Nuclear Research)
Publication date
5 February 2026
Language
EN
Document type
Preprint