Correlation Analysis between Stock Index and Spot Index

An Empirical Study Based on VECM Model

Abstract

Since the reform and opening up, with the continuous strengthening of China's economic strength, the continuous improvement of the financial market, and the increasing appeal of investors to avoid market risks. Since China's first stock index futures contract was listed and traded, the research on the relationship between this financial derivative and the corresponding spot market has been a hot spot in academic circles. It refers to the hot events triggered by the futures market, and it has also been widely concerned by the media, the government and the people. China's financial derivatives market is still in its infancy, the market system is not yet perfect, and the professional quality of institutions and individuals engaged in trading still lags far behind that of investors in western mature markets. How to improve the futures index market mechanism and maintain the stable operation of the market deserves the government's in-depth consideration. China's financial futures market supervision authorities should continue to vigorously promote the improvement and development of China's stock index futures market. Specific measures include: speeding up the introduction of institutional investors to participate in futures trading and cultivating mature market trading subjects; Establish an investor suitability management system to lower the entry threshold of the stock index futures market; Perfecting the risk management system of the futures market will provide the necessary risk barrier for the healthy and stable development of China's financial market.