board member cross firm overlap
What it checks
When a director sits on multiple corporate boards and trades on one, the others often follow. We trade alongside the cross-firm signal.
Mechanism
Firms sharing board members exhibit return co-movement and information transfer; central firms in the board-interlock network earn 4-6% annualized excess.
Signal rule
Shared director CIK -> linked tickers; >= N (2/3) board-overlapping director trades on linked firms in trailing 30 days -> directional focal, hold 21/63/126d.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
sec_insider_tradesForm-4 insider transactions with role, size, and trade direction.
Expected edge
- Paper alpha
- 4-6%/yr top-centrality
- Paper window
- 2000-2010 (Larcker-So-Wang)
4-6%/yr top-centrality (Larcker-So-Wang 2013).
Related families
insider form4Insider & FlowLakonishok-Lee 2001, Cohen-Malloy-Pomorski 2012: corroborated insider purchases (Form 4 transaction_code='P') from multiple insiders within a short window are the single most-predictive insider signal โ ~6%/year alpha over 6-12 months. Single-insider buys are noisy; cluster buys (3+ distinct insiders, or a single buy > $1M from CEO/CFO) are not. Long for 60 days on cluster buys; long for 30 days on a single $1M+ transaction. Sales are deliberately ignored โ they're confounded by liquidity, diversification, and options expiry.
congressional trade clusterEntity-Graph / PoliticalCongressional trades earn 6-12% annualized alpha; the signal strengthens when multiple members trade the same direction within 30 days revealing simultaneous information.
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