Can somebody answer:
Speaking of Resiliency as a characteristic used to measure market liquidity, does higher resiliency symbolize higher market liquidity or lower market liquidity?
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Let’s go by the literal meaning of resiliency:the capacity to withstand or to recover quickly from difficulties.
If the resiliency i.e the capacity to recover quickly is high it means that the scrip is very liquid. And if it takes too long to recover from a downfall. It’s said to be illiquid.
For an example: the recent downfall of Adani stocks followed by a strong upmove- we’ll say the stock is liquid and hence resilient. Why liquid? – because people are there to buy it at every fall hence maintaining the liquidity whereas consider any less famous scrip xyz ltd. If it falls,there’s no one to buy it, there’s no liquidity, hence not resilient.
Hope this helps.
Helpful, thanks.