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Application of Fuzzy AHP in Priority Based Selection of Financial Indices: A Perspective for Investors

Author

Listed:
  • Jana Subrata
  • Giri Bibhas Chandra

    (1 Department of Mathematics, Jadavpur University, Kolkata, West Bengal, India)

  • Sarkar Anirban

    (2 Department of Management and Marketing, West Bengal State University, Barasat, West Bengal, India)

  • Jana Chiranjibe

    (3 Saveetha School of Engineering, Saveetha Institute of Medical and Technical Sciences (SIMATS), Chennai, 602105, Tamil Nadu, India)

  • Stević Željko

    (4 Korea University, 145 Anam-Ro, Seongbuk-Gu, Seoul, 02841 ; Korea)

  • Radovanović Marko

    (5 Military Academy, University of Defence in Belgrade, Belgrade, Serbia)

Abstract

By providing important indicators, financial indices help investors make educated judgements regarding their assets, much like vital sign monitors for the financial markets. The best way for investors to keep up with the market and make strategic adjustments is to keep an eye on these indexes. Researching the most important financial indexes for making educated investing decisions is, thus, quite relevant. Finding the most essential financial indices from an investing standpoint and assigning a weight to each of those indexes are the main goals of this research. A weighted score is derived by combining four financial indices in a Multi-Criteria Decision-Making (MCDM) technique. These objectives are then pursued. Triangular Fuzzy Numbers (TFNs) and the Fuzzy Analytic Hierarchy Process (F-AHP) are used to determine the weights of criteria in this technique. Using these methods together, the research hopes to provide a thorough analysis of the role that different financial indexes have in informing investment choices. This study emphasizes the paramount importance of considering the Price Earning to Growth (PEG) ratio when making investment decisions, followed by the Debt Equity Ratio. Price to Book Value and Dividend Yield, while relevant, carry comparatively less weightage in the overall assessment. Investors are advised to use these insights as a guideline in their financial analysis and decision-making processes.

Suggested Citation

  • Jana Subrata & Giri Bibhas Chandra & Sarkar Anirban & Jana Chiranjibe & Stević Željko & Radovanović Marko, 2024. "Application of Fuzzy AHP in Priority Based Selection of Financial Indices: A Perspective for Investors," Economics, Sciendo, vol. 12(1), pages 1-7, April.
    • Handle: RePEc:vrs:econom:v:12:y:2024:i:1:p:1-7:n:7
    DOI: 10.2478/eoik-2024-0007
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    More about this item

    Keywords

    Financial Indices; Priority Selection; Multi-Criteria Decision-Making (MCDM); Triangular Fuzzy Number (TFN); Fuzzy Analytic Hierarchy Process (F-AHP);
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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