The Correlation Research Of China’s Listed Company Stock Prices And Their Index Of Opearation And Profitability

Correlation between listed companies’ stock price and their performances has always been one of the hottest theme in the research field of economics. A lot of researchers were doing the study from different angles, using different methods, to come up with their own conclusions. The stock price shows the value of the company in the stock market, and the company’s performance can be measured through financial indication rates publicly announced by the companies. The researchers tried to establish the relation of the two, to verify that the companies’operating results are consistent with their reaction to the stock market. Most researchers took one single company or industry into the research, but there has not been so many researches done from the industry perspective on the correlation between stock price and performances.Actually, for different industries, due to their different characteristics, there will be different indication rates related to the impact of the stock in each industry, because of the different social and economic function of the industry system.For example, the profitability index of agriculture production industry will have significant influence on stock prices.As for the wholesale industry,where the sell pattern is bulk sale, the operational index turnover rates impact of inventories and other assets on the stock price is more significant.And for the monopolistic industries like electricity, gas, and water enterprise, the impact of profit index and management index on stock price may not be significant. Therefore, when we study the correlation between stock price and performances, it is necessary to make comparative analysis by industry. By doing this, we shuold not only analyze the problem more clearly, but also provide references and suggestions for the investors’investment,through this method of comparative analysis.According to the previous related studies,researchers usually selected four stock price performance indication rates:per share profitability index rates, operational capability index rates, solvency and development ability index rates.And the former three were frequently selected. But I considered that the profitability and operating capacity rates will directly reflect the performances, and that solvency belongs to the longer-term impact index rates.Therefore, I selected the index rates reflecting the profitability and operating capacity as independent variables,and chose solvency as the control variables, to study the impact on the stock price of the operation ability and profit ability. At the same time, considering the volatility of the stock price, I selected 5 years of index data, respectively,to form the sample of each industry, using the stepwise regression to analyze the effects of the individuals of samples. Although a lot of papers were focused on the correlation between stock price and performance, most will form an one-year sample into a cross-section data,and use multiple linear regression model to do the analysis.So using first difference to do the research can also be the innovation of this paper.Therefore,this paper tries to give an empirical study using stepwise regression analysis to study China’s listed companies of different industry during five years of 2010-2014 on the side of industry,and do comparative analysis of their differences, to draw the corresponding conclusion.