International Journal of New Developments in Engineering and Society, 2017, 1(4); doi: 10.25236/IJNDES.17407.
Yuan Zhefeng, Wang Han
School of Economics and Management, Beijing Jiaotong University, P.R.China
Shenzhen-Hong Kong Stock Connect formally opened on December 5, 2016. Whether the correlation between the exchange rate and the stock price will be affected before or after its opening will affect not only the formulation of China's capital market and foreign exchange market policies but also the decisions made by investors significantly. This paper firstly introduces the theoretical basis of the correlation and cointegration between exchange rate and stock price ,and the empirical analysis of the exchange rate between Hong Kong dollar and Shenzhen stock index before and after the opening of Shenzhen-Hong Kong Stock Connect, and finally concludes that the opening of Shenzhen-Hong Kong Stock Connect, The relationship between the exchange rate and the exchange rate changed from a positive correlation to a negative correlation and the correlation decreased. Before the opening up, under the 5% confidence level, there was no cointegration between the exchange rate and the stock price, after opening, cointegration appears however.
Shenzhen-Hong Kong Stock Connect, exchange rates, stock prices, relevance, cointegration
Yuan Zhefeng, Wang Han. Impact of the opening of Shenzhen-Hong Kong Stock Connect on the relationship between exchange rate and stock price. International Journal of New Developments in Engineering and Society (2017) Vol.1, Num.4: 29-32.
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