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Correlation Of Fundamental And Technical Indicators For A Particular Stock At The Banja Luka Stock Exchange

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  • Almir Alihodzic

    (Faculty of Economics - University of Zenica)

Abstract

The fundamental business indicators are based on an analysis of previous incomes and financial research statements of companies. Unlike the fundamentals, a technical analysis (indicator) is based on the forms related to the movement of stock prices, and determines whether they are repetitive and whether they are predictable. In the capital market in BH, there is a common phenomenon that indicates that certain shares are not traded for more than one day, due to low liquidity, and because of the lack of information and high risk. Also, this paper will analyze one segment of the capital market in BH, i.e. shares of stock index BIRS (Banja Luka Stock Exchange of Securities). The main objective of this research is to determine whether there is a mutual dependence and interdependence in the movement of technical and fundamental analysis indicators, i.e. whether fundamental indicators can affect the movement of stock prices through a multiple linear regression. As independent variables will be used: return on average equity - ROAE, then earnings before interest, taxes, depreciation and amortization – EBITDA, the ratio of total debt to total assets (Leverage) and dividend per share. The price – earnings ratio will be observed as a dependent variable. This study covers the period from 2005 to 2013.

Suggested Citation

  • Almir Alihodzic, 2015. "Correlation Of Fundamental And Technical Indicators For A Particular Stock At The Banja Luka Stock Exchange," Economy of eastern Croatia yesterday, today, tommorow, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 4, pages 728-740.
    • Handle: RePEc:osi:eecytt:v:4:y:2015:p:728-740
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    File URL: http://www.efos.unios.hr/repec/osi/eecytt/PDF/EconomyofeasternCroatiayesterdaytodaytomorrow04/eecytt0472
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    References listed on IDEAS

    as
    1. Tuomo Vuolteenaho, 2002. "What Drives Firm‐Level Stock Returns?," Journal of Finance, American Finance Association, vol. 57(1), pages 233-264, February.
    2. Campbell, John Y, 1991. "A Variance Decomposition for Stock Returns," Economic Journal, Royal Economic Society, vol. 101(405), pages 157-179, March.
    3. Banz, Rolf W., 1981. "The relationship between return and market value of common stocks," Journal of Financial Economics, Elsevier, vol. 9(1), pages 3-18, March.
    4. Keith Anderson & Chris Brooks, 2006. "Decomposing the price-earnings ratio," Journal of Asset Management, Palgrave Macmillan, vol. 6(6), pages 456-469, March.
    Full references (including those not matched with items on IDEAS)

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