Board Member Cross Firm Overlap
In plain terms
When a director sits on multiple corporate boards and trades on one, the others often follow. We trade alongside the cross-firm signal.
How it works
Firms sharing board members exhibit return co-movement and information transfer; central firms in the board-interlock network earn 4-6% annualized excess.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- SEC insider trades
Form-4 insider transactions with role, size, and trade direction.
Expected edge
- Reported return
- 4-6%/yr top-centrality
- Tested over
- 2000-2010 (Larcker-So-Wang)
4-6%/yr top-centrality (Larcker-So-Wang 2013).
Related families
When several insiders buy their own stock within a short window (a 'cluster buy'), it's the most reliable insider signal. Sales are mostly noise.
When 2+ members of Congress trade the same stock the same way within a month, we go alongside the cluster because they likely share insider info from hearings.
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