Investigating the contrarian trading strategy performance in the Tehran stock exchange based on the firm's risk criteria Ebrahim Qashqai 1 , Allah Karam Salehi 2 , Ali Mahmoodirad 3 Received: 13/12/2022 Accepted: 30/03/2023 Extended Abstract Introduction In traditional financial theories, there is this proposition that in every stock exchange, efficiency prevails in stock markets, which means that stock prices are determined fairly with the help of available information. In fact, the efficient market hypothesis is the cornerstone of modern finance. However, there is evidence of market anomalies, such as the momentum effect and the reversal effect. The reverse effect describes the price phenomenon as follows: the shares that had the best (worst) growth in the past tend to perform weak (good) in the following periods. Investors overreact to new information, causing deviation in pricing. Considering the weak efficiency of Tehran Stock Exchange based on previous research and the importance of using the contrarian trading strategy as a tool to help investors in forming a profitable portfolio, the purpose of this research is to investigate the contrarian trading strategy performance under risk criteria. Literature Review One of the strategies for predicting future stock returns is the contrarian trading strategy, which recommends selling stocks with good past performance and buying stocks with poor performance. Under this strategy, the investment portfolio consists of stocks that move against the market trend. According to theoretical principles, the risk factor can intensify the shareholder's emotional behavior in the transaction. Research Methodology This study is an experimental research. The method of this study is a descriptive correlation type. The statistical population includes all companies listed to the 1. Department of Management, Masjed Soleiman Branch, Islamic Azad University, Masjed Soleiman, Iran. 2. Department of Accounting, Masjed Soleiman Branch, Islamic Azad University, Masjed Soleiman, Iran. (Corresponding Author). a_k_salehi@yahoo.com 3. Department of Applied Mathematics, Masjed Soleiman Branch, Islamic Azad University, Masjed Soleiman, Iran. How to cite this paper: Qashqai, E., Salehi, A, K., Mahmoodi Rad, A. (2023). Investigating the contrarian trading strategy performance in the Tehran stock exchange based on the firm's risk criteria. Advances in Finance and Investment, 4(1), 115- 140. [In Persian] https://doi.org/10.30495/afi.2023.1972605.1172 Journal of Advances in Finance and Investment Volume 4, Issue 1 , 2023 pp. 115-140. Paper type: Research paper