Valuation Return or Risk (VR) is a measure of under and over valuation. The graph below shows the degree of undervaluation (positive VR) that the smallest market cap quartile stocks developed by the first quarter in 2009. By contrast the largest market cap stocks were overvalued although not to the same degree.
After Mar '09 the Small Cap stocks had an extraordinary run and the valuation now favors the Large Market Cap stocks
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