A Network Analysis of the Greek Stock Market

Abstract

In this paper we analyse stock relationships in the Greek Stock Market. We propose a model that can depict such relationships and create networks of stocks. We investigate all stocks in the Greek Stock Market for years 2007 and 2012 (one year before and during the current economic crisis). Different networks are created according to the degree of correlation of stocks. These networks are visualized and evaluated, using methods from Social Network Analysis. A number of metrics, mainly centrality measurements, are calculated and interpreted. We discuss the hypothesis that Greek stocks follow the “herd” rule and investigate the role of important actors (stocks) in these networks. Our results show that the Greek Market is a “shallow” market, easily affected by a few big investors or the economic climate.