Application and Optimization of Investment Theories in the Chinese A-share Market

Overall, global stock market is going through periodic variations. Innumerable factors and abnormal fluctuations often impact on it, which may cause significant losses to investors. To predict tendencies and invest by humans is commonly restricted. Aiming to make investment more worry-free and maximize the returns within manageable risks, the paper picks out 3 theories from experienced investors in the US to create quantitative investment programs that automatically select stocks and invest. For narrowing down the scope and being specific, the paper focuses on application and improvement of these theories in Chinese stock market. Based on quantitative analysis and simple moving average reversion (SMAR) strategy, the mature investment theories are applied and optimized in A-share investment. Market data from 2011-8-1 to 2023-8-1 is used to test the outcomes, which indicate that the theories perform a lot better than the benchmark (CSI300) in the time horizon. But with combination of SMAR and some adjustments on functions, the theories have even more satisfying returns, meaning the improved strategies provide high utility value. It is obvious that quantitative analysis and these theories really have positive effects on A-share investment nowadays.