Recall Severity Premium
In plain terms
When a carmaker has a recall involving death or injury, we short more aggressively than for routine recalls.
How it works
Top-severity-tier recalls (death/injury language) produce ~2-3x the absolute return effect of routine product-quality recalls; effect concentrated in the upper quartile.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- NHTSA vehicle recalls
NHTSA vehicle recall campaign data mapped to auto manufacturers.
Expected edge
- Reported return
- 2-3x routine recall
- Tested over
- T+1 to T+20d
Hendricks-Singhal 2003: 2-3x routine recall effect on top-quartile severity.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
When a carmaker has an unusually large recall wave, we short the stock for the next few weeks.
When a carmaker's brand-new model year has its first recall, we short more aggressively - the market reads it as a real design flaw.
Explore Recall Severity Premium on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.