Viral Trends and Stock Markets: Spillover Between Meme Assets and Sectoral Returns

Barbić Tajana () and Čondić-Jurkić Iva ()
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Barbić Tajana: Institute of Economics, Zagreb, Croatia
Čondić-Jurkić Iva: Rochester Institute of Technology, Croatia

Financial Internet Quarterly (formerly e-Finanse), 2024, vol. 20, issue 4, 1-15

Abstract: Meme assets are a unique and modern phenomenon in the stock market, characterized by social media-driven hype and significant price volatility. The aim of this paper is to explore the relationships between meme assets and sectoral dynamics. We employ the Granger causality test to examine predictive relationships between daily returns of GameStop and five meme exchange traded funds and eleven sector index funds. Our results show that selected meme assets have relatively limited impact on various sectoral indices and vice versa, suggesting that meme stocks and meme ETFs can offer diversification benefits for sectoral investments. These findings offer insights to investors in designing their approaches to investment strategies and portfolio management, as well as regulators in their attempt to ensure financial market stability.

Keywords: Meme Stocks; Meme ETFs; Sectoral Indices (search for similar items in EconPapers)
JEL-codes: C32 G15 G41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:20:y:2024:i:4:p:1-15:n:1001

DOI: 10.2478/fiqf-2024-0023

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