The Correlation Analysis Between Fundamentals And Stock Price Of The Listed Companies In China

The effectiveness of China’s stock market has always been the concern of most investors, whether the stock price of listed companies can truly reflect the value of the companies whether listed companies fundamentals and stock prices are related, whether the impact of fundamental information indicators for different sectors is the same and so on, through the research on these questions, we can predict stock market future trend to help investors make better decisions.In order to study the relationship between stock price and fundamentals of listed companies, this paper selects the main financial indicators of listed companies between 1995 and 2015 in securities market as the sample to establish the regression model of stock price and financial indicators of the listed companies. Firstly, partial least squares regression and ridge regression model are established by using the Adaptive-Lasso variable selection method to select the indicators; secondly, the real estate industry and information technology industry were analyzed to illustrate the differences between partial least squares regression model and ridge regression model, influence factors and influence degree of stock prices of two industry. Finally, according to the status of China’s stock market and the conclusions, this study provides some recommendations to regulators.The results showed that: A-share market fundamentals of listed companies on the stock price information indicator have some explanatory power. Both the overall A-share market, individual real estate and information technology industry, net assets per share have passed the test of significance, indicating that stock prices and corporate earnings indicators have greater relevance. At the same time, the factors that influence stock prices of different industries differ, therefore the fundamentals of listed companies which investor concerns should also be different.