Causation vs. Correlation doesn't matter that much in most cases, if your goal is a investment strategy. Most of the research is like "if the ROE in the quarter

Causation vs. Correlation doesn't matter that much in most cases, if your goal is a investment strategy. Most of the research is like "if the ROE in the quarterly report is like this, then the return of the stock will be like that in the next month". Maybe the ROE is the reason for the stock performance, or maybe something else is affecting both the ROE and the future stock performance, (but certainly future stock performance can't just go back in time to affect current reported ROE, in normal cases). Either way, you don't care. What you care is to establish a pattern between a current event and a future event, and whether that hold true in all kinds of scenarios, especially in the near future. Although a direct causation is more robust but if it's a hidden variable you'll have to settle for less.