Can Share Price be Forecasted

Abstract

I have recently opened a trading account in stock market of India. Seeing the ever fluctuating prices of share, I was clueless in how to trade shares using my understanding of financial ratios that I have learnt. This study helps to analyse how the market reacts to the fundamentals of operating performance specified as ratios. The concept of correlation factor is used as it closely predicts the relation between variables. I am looking forward to extend this work to establish general behaviour of unpredictable share prices and to use the interpretation of this work to increase my understanding about fundamentals of operating tools like ratios.

Keywords: Correlation Analysis, Share Price, Financial ratios, ROCE, RONW