Heterogeneous trading behaviors of individual investors: A deep clustering approach

Yoontae Hwang, Junpyo Park, Jang Ho Kim, Yongjae Lee and Frank J. Fabozzi

Finance Research Letters, 2024, vol. 65, issue C

Abstract: While individual investors may have more diverse preferences and trading behavior than institutional investors due to their lack of professional education, many studies tend to lump individual investors together or classify them by socio-demographic characteristics. We conducted an empirical study using account-level trading data for over 300,000 investors in the Korean stock market from 2016 to 2020 to analyze the heterogeneity of individual investors. Our findings reveal notable disparities in profit distributions among the clusters formed based on investors' trading behavior. Therefore, this study emphasizes the importance of exploring the heterogeneity of individual investors to understand their behavior better.

Keywords: Individual investor; Trading behavior; Transactions data; Clustering; Machine learning; Deep learning (search for similar items in EconPapers)
JEL-codes: C45 G40 G50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005117

DOI: 10.1016/j.frl.2024.105481

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