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Parameter behavioral finance model of investor groups based on statistical approaches

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  • Zhuo, Jinwu
  • Li, Xinmiao
  • Yu, Changrui

Abstract

This paper establishes the parameter behavioral finance model of investor groups. There are three key research steps: Firstly, using statistics and investors' investment psychology set up 15 parameters, to describe investor group behavior. Secondly, the genetic algorithm is used to optimize the value of parameters according to the historical turnover data, and optimal parameter values of the stock are given. Thirdly, the simulation method is used to simulate the behavior of different investment groups when the stock market fluctuates. Also, this method can predict the future trend of the stock market based on the simulation data. According to our tests’ results, we found this model can be used to explain the fluctuation of stocks. However, it is still not stable and accurate to forecast future stock prices, thus further research is needed.

Suggested Citation

  • Zhuo, Jinwu & Li, Xinmiao & Yu, Changrui, 2021. "Parameter behavioral finance model of investor groups based on statistical approaches," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 74-79.
    • Handle: RePEc:eee:quaeco:v:80:y:2021:i:c:p:74-79
    DOI: 10.1016/j.qref.2021.01.012
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    References listed on IDEAS

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    1. Shenoy, Catherine & Zhang, Ying Jenny, 2007. "Order imbalance and stock returns: Evidence from China," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(5), pages 637-650, December.
    2. Lapanan, Nicha, 2018. "The investment behavior of socially responsible individual investors," The Quarterly Review of Economics and Finance, Elsevier, vol. 70(C), pages 214-226.
    3. Nolte, Sven & Schneider, Judith C., 2018. "How price path characteristics shape investment behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 33-59.
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    1. Ghada A. Altarawneh & Ahmad B. Hassanat & Ahmad S. Tarawneh & Ahmad Abadleh & Malek Alrashidi & Mansoor Alghamdi, 2022. "Stock Price Forecasting for Jordan Insurance Companies Amid the COVID-19 Pandemic Utilizing Off-the-Shelf Technical Analysis Methods," Economies, MDPI, vol. 10(2), pages 1-18, February.

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