Analysis on stock price movement using Graph Theory / Nadia Syakirah Mohd Zin, Nur Sofiatun Nadhirah Abdul Razak and Nur Syuhadah Naseb

Graph Theory (GT) is the study of graphs, which are mathematical structures used to model pairwise relations between objects. A precisely and quickly forecast stock price peaks and valleys will help in managing the stock market appropriately and guide it in a healthy direction, which will be a strong support for the economy’s long-term growth. Volatility of stock prices can make it challenging for investors to predict the stock prices, as it often fluctuates rapidly and unpredictably. The techniques in GT can be used to analyse the selected stocks, providing insights into market behavior. The main objective in this study is to analyse stock prices using an undirected graph and identify the best sector using k-core analysis, which will help the investors understand the pattern of the stock price movement and decide which sector to invest in the future. The relationship of one stock to another is calculated by using the Spearman rank correlation and comparing it with the minimum threshold, which is 0.6, to get the adjacency matrix. By using the adjacency matrix, an undirected graph is obtained, and k-core analysis is used to identify the best sector by determining, which stock is in the core-dominant category. From all the steps in the methodology, the objective can be achieved and it can be concluded that both the traditional and GT methods have the same result, which is that industrial was the best sector for the investor to invest in. Combining various methods and analysing the stock for a longer time period are examples of recommendations that can be used in future studies.