Author(s)

Hancheng Dong

Corresponding Author

Hancheng Dong

Abstract

Trading financial asset investment is a double-edged sword. From a management point of view, many companies holding transactional financial assets do enhance the liquidity of assets or increase the profitability of idle assets; but from a risk perspective, many companies also have increased trading assets. Based on the complex network theory, this paper uses qualitative and quantitative methods to study systemic financial risks, systemically important institutions and system vulnerability institutions. In qualitative research, this paper establishes a network model based on mutual information coefficient to study the relationship between network correlation, network structure and financial systemic risk. The innovation of this paper is to try to apply the CVaR model based on general distribution and GARCH family model to the risk measurement of China's financial market, and supplement it with qualitative analysis to measure and study the financial market risk in China. The empirical results show that China's financial market is vulnerable to unexpected news and shows the characteristics of the market with relatively large volatility. This puts higher requirements on the establishment of a more effective risk management system in China's financial market.

Keywords

Financial risk; risk measurement model; financial investment strategy