Does the Adaptive Market Hypothesis Reconcile the Behavioral Finance and the Efficient Market Hypothesis?

This study aims to test the adaptive market hypothesis by using myopic behavior of investors as a new proxy. The data have been taken from New York Stock Exchange December 1994 2020. Following this collection data, companies’ stock prices were distributed into six different portfolios based on size, investment, book-to-market value, and operating profit. Ordinal logistic regression was used calculate probability recovery losses after experiencing decline in market. As part robustness analysis, replaces Sharpe ratio with Lower Partial Moment ratio. Most results for are similar. During 1995–1999, 2002–2006, 2010–2020, not shown towards losses, but 2000–2001 2007–2009 exhibited characteristics. Furthermore, move between non-myopic loss aversion, reports that US is both efficient inefficient at various points time, following hypothesis. Thus, such finding could act basis future investment models adapting traditional or building contributing development ones.