Testing the relationship between the stock market and Time series Essay

Testing the relationship amongst the inventorying market place and Time series model - Essay Exampleionship between the stock market and Time series model is aimed at explaining the volatility modelling physical exercised for stock market analysis, gum olibanum evaluating the performance of the ARCH and GARCH models. Data from four Asian stock market indices like Hang Seng index, capital of Indonesia index, KLSE index and Stock exchange of Thailand index during 2000 to 2006 hold in been used in this study. The analysis helped to reach a conclusion that EGARCH is the best model among the GARCH family which helps in estimating the volatility of stock market to predict the stock market for future investment.By analysing recent developments in the stock exchanges gathered from newspaper reports, it is seen that a common apparent motion could be posed among the investors in stock. The question is Is the stock market predictable? It has become the main relate of many researchers f or the last 20 years due to the up and down fluctuations leading to a bear-sized volatility. There are many stock market prediction tools contributed by different researchers which are subservient to both the public and institutions. There arises a question as to why a tool is ask to predict the stock market due to the complexity of the stock market which is mainly influenced by economical, political, and financial features. However, the fact is that markets reaction against each economic shock (i.e. bad news and good news) may diversify from country to country due to their own macro economical and financial characteristics. For example, statistics show that Asian shares have fallen dramatically which is as follows Tokyo by 11%, London Stock exchange by 5.7%, Hang Seng by 7.6%, Indias by 4%, Australia by 6.7% etc. (Wall Street shares yo-yo n.d.). For that reason, it is necessary to use several models to forecast volatility as well as evaluate them. It is seen that South Eastern stock exchanges have responded with lesser impact to the economic recession than European and American economies.The selected countries for this