Study Of Stock Returns Based On Structural Equation Model

The influence factors of the stocks have always attracted the investors since the birth of the securities market.Investors have been hoping to stake a deeper understanding of the operation of the stock market.So far,plenty of research have been done,but there is no good solution to the problem.Investors are regarded as rational economic people in the traditional financial theory.But it is not difficult to find that the majority of our country investors cannot do a rational investment in the growth process of the stock market,which brings various contradictions to China's the stock market and resulting in the stock market in a long-term continuous adjustment process.Because factors affecting the operating characteristics and the stock market price are constantly changing,we must pay close attention to the dynamic changes and the securities market law of China's securities market in different periods to explore the mysteries of stock returns.The paper based on the A-share listed companies as the main research object,according to the average transaction principle to divide the market into the period of rising and falling.and select the period of rising in the end of 2012 to March 2013,by establishing structural equation model,the research of the listed company which is at the beginning of the rise of industry,finance,market and so on various aspects index and its relationship between gains during this period.After the study found that the A stock market rate of return is mainly affected by market factors and industry factors,which the market volume growth rate and turnover rate is the largest influence to market factors,industry factors affected by the gross profit of the industry.However,the profitability and development ability of enterprises have no significant impact on the stock returns.That means the China's stock market is a speculative market,has not formed the value of the investment atmosphere.This paper puts forward the investment strategy according to the result of the structural equation modeling,and applied to the sample stocks in July 2014.Six stocks were selected according to their various economic indicators,and the their yields by the strategy is compared with the index returns over the same period.Results show that the average return of the selected stocks was significantly higher than that of the stock indexes,proving the validity of the strategy.Finally,the deficiency of the model in this paper was summarized,and relevant suggestions were put forward.