The evolution of network topology structure of Chinese stock market

In this paper, we investigate the evolution of topological structure of detrend-return correlation network of stocks in the Shanghai A-share market from Jan. 1, 2001 to Dec. 31, 2016, which is constructed based on the threshold method. In order to get detrend-return, we employ the random matrix theory (RMT) to remove the market trend. This network topology is found to be quite different from that of random network, indicating a specific internal structure of Chinese stock market. Some topological structural characteristics of the network, such as the average degree, the clustering coefficient, and the size of first giant component, are presented. The results show that the network structure of Chinese financial market varies as its performance changes. Particularly, during the 2008 financial crisis and 2015 Chinese stock market turbulence, the value of the average degree and the size of first giant component are significantly higher than those in other years. This finding may shed light on risk management since the overall interaction structure of stock market plays an essential role in it.