A Study Of Securities Investment Risk Assessment Model Basing On The Ahp Method

After two major financial crisis in 1997 and 2008, all governments and the academics will pay a high degree of importance in risk and place more and more widespread interest. Risk is everywhere, of which securities investment is one of the most risky economic behaviors. Therefore, experts and scholars on the investment risks of the securities will never ceased, all hope it has shown some features in the stock market to the quantitative measurement of the size of the risk, so that it can provide a reference to securities investors.Analytical Hierarchy Process(AHP) is a method, which cut complex problem into several small parts, then these parts form a hierarchical tree hierarchy, and it analyzes each level step by step. It is a method of combining qualitative and quantitative, which expresses and deals with subjective judgments in quantitative method so as to achieve the purpose of solving the problem. After years of development, AHP has become a research method which a most scholars have accepted and which has been used in many risk areas, such as information security risks.This article used AHP, such a mature approach in securities investment field. It analyzed various factors which affect securities investment risk. In the quantitative aspects, it selected indicators of time, solvency, operation capacity, profitability and development capacity to calculate. In the qualitative aspects, it selected indicators of technical development capability, management capability,, market trend and other indicators to assess. Then it established a risk assessment model.Then it calculated the weight coefficients of each indicator using the experts scores, and to know how various factors influence the overall risk. In order to verify the correctness of the model, the paper taken ten companies from two industries for example, used data from their financial statements and various experts' overall evaluation of the various indicators and capabilities to calculate and assess for risk assessment of each index value, and it got weight coefficients through the risk assessment model. Finally it gave the total risk value of the ten companies,.This article used AHP method in securities investment areas to study the risk assessment model. While it was building model, it was taking into account the special factors of time. So the whole model is closer to the definition of securities investment risk. It was in line with this study and it will give investors some help.