Author(s)

Tianhong Du

Corresponding Author

Tianhong Du

ABSTRACT

Generally, stock return is affected by the company’s operating performance, distribution policy, macroeconomic conditions and other relevant factors. These financial indicators representing the operating performance of listed companies reflect the financial benefits, asset quality, debt repayment risk and development potential of companies from different aspects. Therefore, the operating performance of listed companies has become an important factor to evaluate and measure the company's return ratio. Inquiring from the annual reports of 30 financial companies which listed in Shanghai A-share market in 2020, the asset liability ratios of each listed company are integrated on the trading day before the 2020 annual report released. Subsequently, the earnings per share and return on total assets are calculated based on Excel. Then, the EVIEWS is utilized to carry out the correlation analysis and measure the optimal position cycle. The limitation of this study is that due to the length of trading daytime cycle, some unstable situation like positive or negative change on coefficient of some independent variable will appear, which indicates that the effects and appearances of some factors are different in the short-term and long-term. In the future, the length of position cycle and frequency can be increase to add other variables which can reflect the company’s operating performance to accurate the final results. Besides, it is necessary to find a way to help listed companies prevent from affecting by the fluctuation of stock market and to search the optimal position cycle to obtain the optimal rate of return. These results shed light on helping investors find the optimal position cycle to obtain the most positive return ratio when the stock market fluctuates.

KEYWORDS

Stock prediction, Eviews, return ratio, Position cycle