The research on division and comparative of stock bubble evolution stage in China

Academics have a commonality of the evolution stages of stock bubble, the stage includes formation, expansion and burst of bubble, but less research on how to divide into the evolution stages. Based on this background, this paper presents the idea for the division of stock bubble evolution stages by utilizing Monte-Carlo simulating techniques and stock return data. On this basis, it division the stock bubble evolution stages in Shanghai and Shenzhen stock markets. The result shows that stock concentrate area just happened in which stock market bubble full burst in 2007, and fewer stock areas just happened in which notable financial crisis in 2008. In addition, we contrastively analyze the stock market trading characteristics under different evolutionary stages. Our results show there are significant differences for turnover rate, trading volume, return, and volatility under the different evolutionary stage when the level of significance was 5%.