Research on the Value of Stock Investment based on Factor Analysis and Cluster Analysis

Abstract

This paper mainly explores the important practical significance of stock investment factor analysis. The factor analysis method has been applied in economics, sociology, management, and other research fields, its main purpose is to describe the basic hidden variables hidden in a group of measured variables, which cannot be directly measured. This paper takes 62 listed companies of the North Exchange as examples for analysis. The formation mechanism of a stock price is very complex, which needs to be analyzed by many factors. Several different factors are analyzed by IMO and Bartlett tests and the orthogonal rotation method. Finally, the price factor, trade factor, debt factor, earnings factor and growth factor are determined. Factor scores are then calculated and compared for each stock. Descriptive analysis was used to get the final conclusion. Through the use of factor analysis, investors can make quantitative analysis of each index and extract the factors affecting the stock, so as to make a relatively objective evaluation of the listed company's stock, and provide an evaluation criterion for investors.