The Influence Of Institutional Investors To Participate In The Stock Index Volatility

Research evidence suggests that institutional investors to participate in has the considerable influence on the stock market. This leads to a index effect and influence on the assets transaction. These are difficult to use the general asset pricing model to explain it. We simply believe that the economy as a whole composed of institutional investors and individual investors, and financial institutions pay more attention to their relative to the result of a certain index. Our article structure is easy to understand, with expressed in the standard formula we get the correlation analysis results.We observed that financial institutions will choose them, the best investment portfolio including their benchmark index and the extra demand for stocks. This can cause the price pressure to push the stock index and the index of the stock is not be affected. Due to the institutional investors have their own unique advantages, all financial institutions than individual investors want more risk so that increase the stock index stock volatility and stock market volatility and cause sharp ratio counter-cyclical. Institutional investor’s trade increased their benchmark index of the relationship between a lot of stock to impact on stock index.Institutional investors is considered an asset management company, and so on institutional investors. These managers authorization management mutual funds, hedge, endowments, pension funds, assets in Banks or insurance companies’ portfolio management team, and so on. In our study, we mainly aimed at the most important features of these professional managers’ motivation: compared to some benchmark index will pay more attention to their results, they have a more professional level, and quicker to obtain the effective message. This property has led institutional investors different from individual investors. Relative results is important for institutional investors, because liquidity and portfolio of new money to asset management companies pay depends on it at the end of the year, or because managers care about their position of profession. our purpose is to explore how institutional investors choose the optimal portfolio affects stock index, and, in the process is how to increase the economic lever and the volatility of the stock market.