Application of clustering in virtual stock market

Abstract

The groups of companies are categorized due to the splitting of financial markets into diverse sectors. The market scenario much is directory related to the rates of share prices that are expected to move up or down. There are several factors that influence the individual share prices. A profitable share market always witnesses the trend of the rates plunging down. Within the market sector, there is anticipation for the shares to move for the most part, mutually. In this case ,our aim is to identify the groups of shares that do move collectively and identifiable in conditions of corporate activity. A hierarchical clustering algorithm, tree GNG, have identified groups of companies that cluster in clearly identifiable sectors. This categorization of sector scheme is accepted all over the world. © 2011 Springer-Verlag Berlin Heidelberg.