Study on Characteristics, Opportunities and Risks of Southeast Asian Stock Markets from the Perspective of Mathematical Finance

Abstract

Based on mathematical finance theory, this paper conducts an in-depth study on Southeast Asian stock markets. Firstly, it introduces the composition of Southeast Asian stock markets, their development history and their position in the global financial landscape, analyzes the scale, liquidity and industry distribution characteristics of the major markets in Singapore, Indonesia, Thailand, etc., and analyzes their market performance with typical cases. Then, it elaborates on the specific application and practical effects of mathematical finance theories such as capital asset pricing model, portfolio theory and risk management model in Southeast Asian stock markets. It further discusses the investment opportunities in Southeast Asian stock markets, such as economic growth drive, industry development and favorable policies, as well as the risks in market, credit, exchange rate, political policies and so on. Finally, investment strategies based on mathematical finance such as diversification, quantitative investment and risk hedging are proposed. The study shows that mathematical finance theories can provide effective support for investment decision-making and risk management in Southeast Asian stock markets, help investors grasp market opportunities and avoid risks, and provide theoretical references and practical lessons for financial institutions and policy makers.