Uncovering the impacts of structural similarity of financial indicators on stock returns at different quantile levels

Xian Xi, Xiangyun Gao, Jinsheng Zhou, Huiling Zheng, Jiazheng Ding and Jingjian Si

International Review of Financial Analysis, 2021, vol. 76, issue C

Abstract: The mining industry is the upstream industry of national economic development. In recent years, the mining financial market has rapidly developed. Stock returns have always been a hot topic for investors and researchers. There are many factors affecting stock prices, such as market supply and demand, national policies and the price fluctuations of other financial products. The most essential factor affecting stock price fluctuation is the operating condition of the listed companies that issue shares. A series of financial indicators comprehensively and systematically reflect listed companies' current earnings and future development potential. However, there are few studies on the structure of financial indicators of listed mining companies. Therefore, we take listed mining companies as the research object to explore whether the structural similarity of their financial indicators can uncover their stock returns. The research findings are as follows: (1) The strength of the structural similarity of financial indicators has a significant negative impact on annual returns, so enterprise managers should adjust their business model and attach importance to personalized development. (2) Similar media capabilities have a negative impact on companies with high annual stock returns and a positive impact on companies with low annual stock returns. (3) The impact of similar cohesion on annual returns varies across different networks and it has a positive effect on the earnings of low-returning companies in operation network. A specific analysis should be carried out according to different financial indicator networks to diversify investment.

Keywords: Financial indicators; Stock return; Listed mining company; Quantile regression model; Complex network (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:76:y:2021:i:c:s1057521921001253

DOI: 10.1016/j.irfa.2021.101787

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