Sectoral Analysis of the US Stock Market through Complex Networks

Purpose: This study was carried out to analyze the structure of aggregated network at level economic sectors and reveal central/peripheral sectors. Design/Methodology/Approach: The uses method complex networks, with two-step procedure employed construct First, MST approach is utilized based on cross-correlation 496 stock price returns S&P500 Index. Then, In addition, graph, theory, multi-dimensional scaling (MDS), relative importance approaches are employed. Findings: results indicate that sectoral has a core/periphery structure. Based centrality measures, ranking provided. Of 11 sectors, 3 classified as central nodes, 4 peripheral remaining intermediate. configuration analysis demonstrates graph consists two parts star-like structure, connected through industrials sector. Practical Implications: An assets can be applied ascertain direction movements in market. division into nodes important implications for management an optimal portfolio stocks. Originality/value: contributes theory strategy design. A unique proposed using MST-based approach. Detection market vital investors regulators alike.