The effect of stock fragility on the rate of stock price convergence

Investors increase the speed of stock price convergence by being aware of the fragility and understanding how companies' financial methods change to achieve the expected return. Therefore, the purpose of this study is to investigate the effect of stock fragility on the rate of stock price convergence.

The statistical population of this research is the companies listed on the Tehran Stock Exchange, among which, data are available for 87 companies and the time horizon from 2009 to 2019. To test the research hypotheses, the generalized least squares regression model has been used.

The results of the study indicate that there is a positive and significant relationship between stock fragility and the speed of stock price convergence.

Emotional behavior by investors is one of the threatening risks in capital market transactions.

Contribution: 

The above issue is one of the new issues in the capital market that due to the new areas of fragility and the speed of stock price convergence, little research has been done at the national level and at the international level from a few studies conducted in different dimensions of this Areas are considered; Less attention has been paid to this dimension of research variables. This research has tried to address the research topic at the company level. Identifying the factors of stock fragility and strengthening the speed of convergence is a suitable ground for economic stabilization and relative stability in the stock market.