Geography effect is investigated for the Chinese stock market  , based on the daily data of individual stocks. Companies located around the stock markets are found to greatly contribute to the markets in the geographical sector. A geographical correlation is introduced to quantify the geography effect on the stock correlation, which is observed to approach steady as the company location moves to the northeast China . Stock distance effect is further studied, where companies are found to more likely set their headquarters close to each other. In the normal market environment, the stock correlation decays with the stock distance , but is independent of the stock distance in and after the financial crisis .
Geography effect is investigated for the Chinese stock market including the Shanghai and Shenzhen stock markets , based on the daily data of individual stocks. The Shanghai city and the Guangdong province can be identified in the stock geographical sector. By investigating a geographical correlation on a geographical parameter, the stock location is found to have an impact on the financial dynamics, except for the financial crisis time of the Shenzhen market . Stock distance effect is further studied, with a crossover behavior observed for the stock distance distribution. The probability of the short distance is much greater than that of the long distance. The average stock correlation is found to weakly decay with the stock distance for the Shanghai stock market, but stays nearly stable for different stock distance for the Shenzhen stock market .
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including the Shanghai and Shenzhen stock markets
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Companies located around the stock markets are found to greatly contribute to the markets in the
The Shanghai city and the Guangdong province can be identified in the stock
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A geographical correlation is introduced to quantify the geography effect on the stock correlation, which is observed to approach steady as the company location moves to the northeast China
By investigating a geographical correlation on a geographical parameter, the stock location is found to have an impact on the financial dynamics, except for the financial crisis time of the Shenzhen market
R
where companies are found to more likely set their headquarters close to each other. In the normal market environment, the stock correlation decays
with a crossover behavior observed for the stock distance distribution. The probability of the short distance is much greater than that of the long distance. The average stock correlation is found to weakly decay
R
, but is independent of the stock distance in and after the financial crisis
for the Shanghai stock market, but stays nearly stable for different stock distance for the Shenzhen stock market