Correlation analysis between stock prices and four financial indexes for some listed companies of mainland China

摘要

Industry selection is vital for making informed investment decisions. This paper studies on which financial index had a reasonably high correlation with stock prices during the past thirteen years. The five financial indexes include Revenue, Net profit, Earning per share, Revenue per stock, Trading Volume. The results show that, in pharmaceutical industry, stock prices had a strongest correlation with these five indexes, in some industries like Electrics Information industry, stock prices had a higher correlation with Revenue or Net profit than other indexes, in some other industries like Wine-making industry, stock prices were much more correlated with Revenue per share or Earning per share, in Real Estate industry, stock prices were much more correlated with the Trading Volume, and in some other industries like Power Equipment industry there were seems little correlation between them, which provide a valuable reference to investors when they make a long-term investment decisions.