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Dynamic Communities in Stock Market

Author

Listed:
  • Xiangquan Gui
  • Li Li
  • Jie Cao
  • Lian Li

Abstract

The stock market has the huge effect and influence on a country or region’s economic and financial activities. But we have found that it is very hard for the prediction and control. This illustrates a critical need for new and fundamental understanding of the structure and dynamics of stock markets. Previous research and analysis on stock markets often focused on some assumptions of the game of competition and cooperation. Under the condition of these assumptions, the conclusions often reflect just part of the problem. The stock price is the core reflections of a stock market. So, in this paper, the authors introduce a methodology for constructing stock networks based on stock prices in a stock market and detecting dynamic communities in it. This strategy will help us from a new macroperspective to explore and mine the characteristics and laws hiding in the big data of stock markets. Through statistical analysis of many characteristics of dynamic communities, some interesting phenomena are found in this paper. These results are new findings in finance data analysis field and will potentially contribute to the analysis and decision‐making of a financial market. The method presented in this paper can also be used to analyze other similar financial systems.

Suggested Citation

  • Xiangquan Gui & Li Li & Jie Cao & Lian Li, 2014. "Dynamic Communities in Stock Market," Abstract and Applied Analysis, John Wiley & Sons, vol. 2014(1).
    • Handle: RePEc:wly:jnlaaa:v:2014:y:2014:i:1:n:723482
    DOI: 10.1155/2014/723482
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    References listed on IDEAS

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    2. Vizgunov, A. & Goldengorin, B. & Zamaraev, V. & Kalyagin, V. & Koldanov, A. & Koldanov, P. & Pardalos, P., 2012. "Applying Market Graphs for Russian Stock Market Analysis," Journal of the New Economic Association, New Economic Association, vol. 15(3), pages 66-81.
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