Analysis On The Linkage Between The Real Estate Sector And The Bank Sectorba On Shanghai Stock Market

Real estate industry and banking industry are two of the most important industries toinspire the development of China’s economy. And there is close connection between thethem. Real estate industry is capital-intensive industry, and banking industry is itsimportant source of funding. With the rapid development of the real estate industry in ourcountry, as well as the reform and development of China’s banking industry, thereflationship between them is closer and closer.Along with the accelerating pace of global economic integration, stock prices risinginfluence each other between different sectors in one mareket or even between differentcontrys’ markets. And to some extent, they have the same variation trend, which meansthere is a linkage effect between these markets and sectors. Stock market linkage effectbetween different secoters refers to the prices or indexes of different sectors belong toone marker rise or fall together in a certain period.Theory and reality both show that thereal estate industry and banking industry are closely linked. Thereofre, if investors canmaster the linkage effect between them, they can determine one’s rally accoding to theother, in this way they can enhance the ability of profit; at the same time, they can alsofind and prevent the risk happenning.This passage carry on the quantitative analysis to the linkage between the estate andbanking firstly; and then qualitative analisis is carried on.Whether there is linkage between the real estate sector and the banking sector in ourA stock market indeedly and how the linkage happens between them?Aiming at thisquestion, this passage states the theory abroad and home firstly, then it introduces thesituaions of these two sectors. And then data is selected and the model is set. Thispassage selects the daily average yields between December30years on July2,2009toSeptember30of the two sectors. the quantitative finance analysis methods includingsimple correlation analysis, ADF test, Granger causality test, etc are adopted.The nextpart analyses the reason of the linkage betweeen these two secors and conclude that theseexits linkage beteen them indeedly. They are mutual granger causes, and the real estate sector influneces the banking sector more signifcantly and longer. Finally is theinvestment suggestions.