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Is the capital floating from Hong Kong to Mainland China smart?

Author

Listed:
  • Chengying He

    (Business School of Guangxi University, Nanning, Guangxi 530004, P. R. China)

  • Xiaoxu Geng

    (Business School of Guangxi University, Nanning, Guangxi 530004, P. R. China)

  • Binchu Pan

    (Business School of Guangxi University, Nanning, Guangxi 530004, P. R. China)

Abstract

This paper uses the methods of portfolio analysis, sharpe ratio, market value size grouping, and asset pricing model to study whether Northbound Capitals are smart funds. The results show that the return rate of Northbound capital outflow of stocks underperforms the index, while the return rate of continuous inflow stocks outperforms the index, and large-scale market capitalization stocks have received the highest returns. Also, this paper finds that the stocks that continue to flow in Northbound Capital have significant excess returns. Therefore, Chinese investors can learn from the investment methods of Northbound Capital to improve their investment level.

Suggested Citation

  • Chengying He & Xiaoxu Geng & Binchu Pan, 2021. "Is the capital floating from Hong Kong to Mainland China smart?," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-23, June.
    • Handle: RePEc:wsi:ijfexx:v:08:y:2021:i:02:n:s2424786321410097
    DOI: 10.1142/S2424786321410097
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