We connect stocks through their common active mutual fund owners. We show that the degree of shared ownership forecasts cross-sectional variation in return correlation, controlling for exposure to systematic return factors, style and sector similarity, and many other pair characteristics. We argue that shared ownership causes this excess comovement based on evidence from a natural experiment-the 2003 mutual fund trading scandal. These results motivate a novel cross-stock-reversal trading strategy exploiting information contained in ownership connections. We show that long-short hedge fund index returns covary negatively with this strategy, suggesting these funds may exacerbate this excess comovement. Barberis and Shleifer (2003) and Barberis, Shleifer, and Wurgler (2005) argue that institutional features may play an important role in the movement of stocks' discount rates, causing returns to comove above and beyond the comovement implied by their fundamentals. In this paper, we propose a new approach to document that type of institutional-based comovement. Based on mounting evidence since Coval and Stafford (2007) that mutual fund flows result in price pressure, we focus on connecting stocks through active mutual fund ownership. Specifically, we forecast cross-sectional variation in return correlation for stock pairs using the degree of common ownership by active mutual funds. Our bottom-up approach allows us to measure institutional-driven comove-

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Predicting and quantifying alternative splice forms

SPACE is an algorithm developed to predict and quantify the pre-mRNA splicing structure of transcripts using exon and 'exon plus junction' microarray data.

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BackgroundMicroarrays strategies, which allow for the characterization of thousands of alternative splice forms in a single test, can be applied to identify differential alternative splicing events. In this study, a novel splice array approach was developed, including the design of a high-density oligonucleotide array, a labeling procedure, and an algorithm to identify splice events.ResultsThe array consisted of exon probes and thermodynamically balanced junction probes. Suboptimal probes were tagged and considered in the final analysis. An unbiased labeling protocol was developed using random primers. The algorithm used to distinguish changes in expression from changes in splicing was calibrated using internal non-spliced control sequences. The performance of this splice array was validated with artificial constructs for CDC6, VEGF, and PCBP4 isoforms. The platform was then applied to the analysis of differential splice forms in lung cancer samples compared to matched normal lung tissue. Overexpression of splice isoforms was identified for genes encoding CEACAM1, FHL-1, MLPH, and SUSD2. None of these splicing isoforms had been previously associated with lung cancer.ConclusionsThis methodology enables the detection of alternative splicing events in complex biological samples, providing a powerful tool to identify novel diagnostic and prognostic biomarkers for cancer and other pathologies.

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We investigate the influence of simultaneous equity holdings by creditors (dual holders) on investment efficiency. Such creditors have stronger incentives and power to monitor firm investment as they have cash flow and control rights from both debt and equity sides. We provide evidence that dual holders, particularly noncommercial bank dual holders, significantly mitigate overinvestment. For high growth firms and those subject to debt overhang, dual holders also alleviate underinvestment. Equity value increases at the presence of dual holders. Our results indicate that by improving firm investment efficiency, dual holders not only make creditor investments safer but also create value for shareholders. Received March 26, 2019; editorial decision September 17, 2019 by Editor Isil Erel.