The Similarity of Stock Prices and Indices in Progressing Information Technology Environment
Tamer Cagatay, Bertan Badur · 2007
Technological progress is an important aspect that affects the financial progress of enterprises. Due to high information share and on-line follow-up opportunities, response time becomes shorter resulting in the rapid change of financial data of companies. The purpose of this paper is to find the similar patterns in the behavior of company shares and stock indices which are triggered by information technology progress. Similar responses in financial time series data initiated by technological developments are expressed in form of a similarity index, and behavior of this index is explored by time series data mining techniques. Technological progress indicators that are evaluated in the literature are considered, and relationship between similarity index and technology progress indicators is investigated. Our hypothesis is that similarity in the company shares and stock indices behavior increases as information technology improves.