The Research On The Construction And Nature Of Stock Market Complex Network Based On The Optimal Threshold Method

Network science provides a powerful tool for exploring the mysteries of complex systems and opens up a whole new perspective.The financial network,constructed with complex network theory,reflects the interdependence between countries and financial institutions.It is a unique methodology for the study of the global economy.In this paper,the daily return rate of 2340 shares in the Chinese A Share Market are collected.On the basis of the threshold 0.5,the optimal threshold 0.730 is found by determining the effective threshold interval and observing the changes of the number of nodes in the maximum connected subgraph,and then a complex network of securities market is constructed.Louvain algorithm and modularity evaluation model are used to divide the network into 9 parts.In the comprehensive analysis of the nature of the network,through the average path length and clustering coefficient of the network,the stock market network has the small world nature;through analyzing the degree of nodes and betweeness centrality,the key nodes of the network and the larger intermediary nodes are found;through observing the community structure,3 of the 9 communities are completely isolated,while the other 6 are interconnected to form a interlaced network,indicating that the isolated 3 industries are in weak associations with other industries;through the analysis of associations between the former 6 communities,it is found that each community include shares listed in the Shanghai and Shenzhen Stock Markets,therefore in the stock market network,the factors that affect the division of the community are not the listed exchange but the industries,and the stocks with greater relevance to the communities is also stocks with greater influence on the whole stock market;through researching the link between nodes in each community,the factors that affect the association within communities are industry and region.To sum up,this paper initially uses the optimal threshold method to construct the Chinese A stocks market network and observe the financial market in China,which provides a new perspective for the analysis and study of the stock market operation.It brings a new way of consideration for the management of the stock market regulators,and also provides a new way for the investors to analyze and invest in the stock market.