Analysis of Investments in Financial Markets

Session

Management, Business and Economics

Description

Making an investment nowadays poses a risk. This research presents the technical analysis of the prices of the two largest US indexes like NASDAQ and Dow Jones, as well as the largest index of Germany DAX and England FTSE100. From these indices will be taken, as a basis by two joint stocks companies each according to market capitalization. According to the research of the indices in total, will be the 4 largest world indices and the 8 most influential and developing companies in history. A market index is a hypothetical portfolio of investment securities that represent a segment of the financial market. Some indices have value based on Capital Ratio and Income Ratio. In order to register shares or securities on the NASDAQ electronic exchange, a company must meet certain requirements based on finance, liquidity, governance and corporate, and have at least three market makers. The basic purpose of the research is based on stock market analysis, to reach a decision on which is the most suitable asset, the most profitable for investment, the best time to invest, and where financial resources should be used for investment. The methodology used this research as quantitative, where numerical data or time series are obtained from Yahoo Finance, as a research literature from scientific publications and journals and books. Arithmetic means a standard deviation where they used to estimate the central tendency and the distribution of the results, while Spearmen correlation and linear regression were used to find the correlation between the treated variables. Based on the information used by the literature we have reached a conclusion with a financial overview of how the investment decision steps should proceed, which depend on the market direction in the short, medium and long term. According to the correlation, the American index has the strongest correlation with the European company. The standard deviation in the research is realized by comparing the prices of the companies with the indices which participate. According to the standard deviation we can say that Apple and Microsoft in the American index and in the European index the companies Volkswagen and Siemens have the highest market volatility. According to the linear regression, we can conclude the forecast of the movements of the indices, where the NASDAQ index is predicted to have the largest increase with 6%, while the Dow Jones index of 4%. From the European indices, it is predicted that the largest increase will be in the company DAX with 3%, while FTSE100 with 2%. The topic under analysis is useful for potential investors to inform how capital markets work, how it is traded through various platforms so that investors can prepare a portfolio of securities with the highest returns and the lowest risk (risk diversification). Also, since Kosovo does not yet have an Exchange established as an organized securities market, we hope that the information we will present in the paper will be useful to all future users.

Keywords:

Investment, market, index

Session Chair

Bashkim Nurboja

Session Co-Chair

Florin Aliu

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-437-96-7

Location

Lipjan, Kosovo

Start Date

31-10-2020 3:15 PM

End Date

31-10-2020 4:45 PM

DOI

10.33107/ubt-ic.2020.342

This document is currently not available here.

Share

COinS
 
Oct 31st, 3:15 PM Oct 31st, 4:45 PM

Analysis of Investments in Financial Markets

Lipjan, Kosovo

Making an investment nowadays poses a risk. This research presents the technical analysis of the prices of the two largest US indexes like NASDAQ and Dow Jones, as well as the largest index of Germany DAX and England FTSE100. From these indices will be taken, as a basis by two joint stocks companies each according to market capitalization. According to the research of the indices in total, will be the 4 largest world indices and the 8 most influential and developing companies in history. A market index is a hypothetical portfolio of investment securities that represent a segment of the financial market. Some indices have value based on Capital Ratio and Income Ratio. In order to register shares or securities on the NASDAQ electronic exchange, a company must meet certain requirements based on finance, liquidity, governance and corporate, and have at least three market makers. The basic purpose of the research is based on stock market analysis, to reach a decision on which is the most suitable asset, the most profitable for investment, the best time to invest, and where financial resources should be used for investment. The methodology used this research as quantitative, where numerical data or time series are obtained from Yahoo Finance, as a research literature from scientific publications and journals and books. Arithmetic means a standard deviation where they used to estimate the central tendency and the distribution of the results, while Spearmen correlation and linear regression were used to find the correlation between the treated variables. Based on the information used by the literature we have reached a conclusion with a financial overview of how the investment decision steps should proceed, which depend on the market direction in the short, medium and long term. According to the correlation, the American index has the strongest correlation with the European company. The standard deviation in the research is realized by comparing the prices of the companies with the indices which participate. According to the standard deviation we can say that Apple and Microsoft in the American index and in the European index the companies Volkswagen and Siemens have the highest market volatility. According to the linear regression, we can conclude the forecast of the movements of the indices, where the NASDAQ index is predicted to have the largest increase with 6%, while the Dow Jones index of 4%. From the European indices, it is predicted that the largest increase will be in the company DAX with 3%, while FTSE100 with 2%. The topic under analysis is useful for potential investors to inform how capital markets work, how it is traded through various platforms so that investors can prepare a portfolio of securities with the highest returns and the lowest risk (risk diversification). Also, since Kosovo does not yet have an Exchange established as an organized securities market, we hope that the information we will present in the paper will be useful to all future users.