Dynamics Interaction of Speculation and Diversification in Shares.

Abstract

In the capital market there are two commonly analysis used to analyze price, namely the fundamental and technical analysis. Those analysis are used to estimate the price. This paper aims to show the dynamics of the two stocks with fundamentalist, chartist and market reaction parameters. Based on the price reduction established by market maker, one can obtain dynamics discrete systems with seven dimensions that describe the development of prices, the expected yield, variants and covariance. The stability in the system is strongly influenced by the parameters of chartist. Using simulation, it can be concluded that the chartist parameters and rate of market reaction parameters to price changes parameters can cause fluctuations in the stock price dynamics. Keywords: fundamentalist, chartist.