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Clustering Techniques In Financial Data Analysis Applications On The U.S. Financial Market

Author

Listed:
  • ELENA CLAUDIA SERBAN

    (The Bucharest University of Economic Studies)

  • ALEXANDRU BOGEANU

    (The Bucharest University of Economic Studies)

  • EUGENIU TUDOR

    (The Bucharest University of Economic Studies)

Abstract

In the economic and financial analysis, the need to classify companies in terms of categories, the delimitation of which has to be clear and natural occurs frequently. The differentiation of companies by categories is performed according to the economic and financial indicators which are associated to the above. The clustering algorithms are a very powerful tool in identifying the classes of companies based on the information provided by the indicators associated to them. The last decade imposed to the economic and financial practice the use of economic value added as an indicator of synthesis of the entire activity of a company. Our study uses a sample of 106 companies in four different fields of activity; each company is identified by: Economic Value Added, Net Income, Current Sales, Equity and Stock Price. Using the ascending hierarchical classification methods and the partitioning classification methods, as well as Ward’s method and kmeans algorithm, we identified on the considered sample an information structure consisting of 5 rating classes

Suggested Citation

  • Elena Claudia Serban & Alexandru Bogeanu & Eugeniu Tudor, 2013. "Clustering Techniques In Financial Data Analysis Applications On The U.S. Financial Market," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 176-194, August.
    • Handle: RePEc:cbu:jrnlec:y:2013:v:4:p:176-194
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    References listed on IDEAS

    as
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    2. Ben‐Hsien Bao & Da‐Hsien Bao, 1998. "Usefulness of Value Added and Abnormal Economic Economic Earnings: An Empirical Examination," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(1‐2), pages 251-264, January.
    3. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    4. Andrew C. Worthington & Tracey West, 2004. "Australian Evidence Concerning the Information Content of Economic Value-Added," Australian Journal of Management, Australian School of Business, vol. 29(2), pages 201-223, December.
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