Journal of Business & Economic Policy

ISSN 2375-0766 (Print), 2375-0774 (Online) DOI: 10.30845/jbep

Using Hierarchical Correlation in Macro-Economic Market for Taiwan Stock Market Analysis
Kuo-ChenLi, Ming-Ruei Zou, Shih-Ming Pi, He-Syuan Huang, Wei-Xin Ding, Yen-Hsien Lee

It is important for investors to make proper and appropriate investments in stock markets. Macro-economic or other technical indicators are commonly used by investors to project the stock market. Based on the previous researches, there is a considerable degree of volatility between the macro economy and stock prices. The macro economy has a certain degree of predictive power. In addition, geographical location of the country is one of the most important factors that affect the stock market linkage in various countries. The study uses the macro-economic variables to explore the three-tier hierarchical associations of local, regional and global areas. The association rules are extracted to reveal the hierarchical relations among Taiwan stocks, macro economies in Taiwan, Japan, China and the United States. The outcome shows the hierarchical rules as the sound references to help investors while investing in the stock market.

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