Correlation Analysis Between Financial Ratios And Stock Price Under The Background Of "Double Carbon"

With the rapid development of China’s financial system,Chinese investors pay more and more attention to the A-share market.In order to enrich the activity of the stock market,meet the listing and financing needs of different enterprises,and attract more investors to invest in stocks,the number of newly issued stocks in China’s market is also increasing.Facing the situation that the stock market does not rise as a whole,but the issuance of new shares continues,how to better choose stocks and more steadily improve their return on investment is the most concerned problem of many stock investors.In view of the openness and easy access of the company’s financial report data,the existing stock valuation theories in the market often focus on the financial information in the company’s financial report,but the analysis framework of non-financial information is not perfect.Since the concept of sustainable finance and sustainable investment was put forward,in addition to the conventional financial indicators,investors began to incorporate non-financial information into the investment concept in the investment process,such as the company’s sustainable development ability.Combined with the background of the implementation of China’s current "double carbon" policy,this thesis selects the carbon neutralization score in the carbon neutralization evaluation system of Huazheng as the non-financial information to measure the company’s sustainable development ability.This thesis selects the annual report data and non-financial index carbon neutralization score data of all A-share enterprises from 2018 to 2020.The enterprise annual report index includes 21 bottom indicators,which are mainly divided into five key indicators:profitability index,valuation index,Solvency Index,operation ability index and growth ability index.Carbon neutralization score is used as a key indicator alone.Firstly,this thesis uses panel data regression to explore the correlation between 21 bottom indicators in enterprise annual report data and carbon neutralization score and stock price.As the results show that there is multiple collinearity between the 21 bottom indicators and carbon neutralization score of enterprise annual report data,we further use factor analysis model to explore the impact of five key financial indicators and carbon neutralization score on stock price.For all A-share enterprises,the results show that the profitability index,valuation index and Solvency Index in the enterprise financial index are significantly positively correlated with the stock price,and the carbon neutral score of non-financial index is significantly positively correlated with the stock price.Among them,the profitability index has the strongest correlation with stock price.In addition,this thesis replaces the stock pool with CSI 300 constituent stocks.The results show that the profitability and valuation indicators in the enterprise financial indicators are significantly positively correlated with the stock price,and the carbon neutral score of non-financial indicators is also significantly positively correlated with the stock price,but the growth ability index is significantly negatively correlated with the stock price.Among them,the profitability index has the strongest correlation with stock price.