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Research Paper | Finance | China | Volume 7 Issue 6, June 2018 | Popularity: 6.7 / 10

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Analysis of the Correlation between the Price and Volume in Shanghai Stock Market

Jinhan Zhao

Abstract: The article applied least-squares estimation and quantile regression to study the relationship between the volume and closing price in Shanghai stock market, turning to linear studies, which makes the correlation of stock trading volume and price for promotion, and conclusions are drawn that is different from predecessors & #039,. The empirical results show that there is a stable positive correlation between the trading volume and the closing price of Shanghai stock market, that is, the higher the trading volume is, the higher the closing price is, and the equation is significant. At the 70 %, 75 % and 80 % quantile level of volume, the correlation between the two is greatly Iimproved, and the performance is highly linear. The results show that when the stock is rising, the high volume of the shares can be judged as the high point of the stock price, which determines the selling probability and the corresponding upper limit of risk value. This conclusion is helpful for investors to judge the trend of stock, reduce the losses caused by non-rational factors, and have the guiding significance in the stock selling operation.

Keywords: The relation between volume and price, Linear regression, Volume, Stock price,

Edition: Volume 7 Issue 6, June 2018

Pages: 201 - 209

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