Analysis of Stock and Futures Price Fluctuations Based on Mathematical Model

Abstract

As the market becomes more transparent and trading strategies become homogeneous, the prediction of prices has become more difficult. This paper has selected the closing prices of the stock market and futures market from 2016 to 2019 and built the VAR model and ARMA-GARCHX models to study the relationship between the closing prices of the stock and futures markets. This paper found that the futures market is greatly affected by the stock market, and the stock market is less affected by the futures market. This paper uses specific data for mathematical modeling analysis, and the results obtained are highly reliable. The model provides a valuable tool for understanding and predicting market volatility, which is essential for investors seeking to make informed decisions in this context. As a result of this study, investors can predict the volatility of the futures market through the fluctuations of the stock market, thereby avoiding risks and improving returns.