Studies Of Correlation Between P/e And Security Investment Risk

For the inventors, identify and avoid the risk of security while make an investment decision is very important. Native and foreign scholars has been make a log-term unremitting research about this problem, and had invented a wide range of risk measurement models and risk-based valve assessment model. Among of that many scholars widely use P/E as the mark to measure stock foam. In the investment activities many people also use P/E to measure the risk of certain shock. But is it effectual using P/E as the measurement of the risk?In this article we use Positive Analysis methods to analyze the correlativity between P/E and the security risk (here we research stock investment risk as the security risk)., and we have found that there is correlativity between P/E and the security risk which is not significant. And then we have separately analyze the factors that make a significant influence on P/E or security risk, and find that there is some factors make significant influence both on P/E and security risk, as well as some factors make significant influence only on P/E or security risk. Above on it, we establish a regression model including P/E to measure the security risk. In the last, we made an empirical research to the regression model with data from 2000 to the third quarter of 2008 in shanghai security market by the compare with the VAR method and variance method.