Hierarchy Analysis Process Under Fuzzy Environment: A Positive Way of Selecting Stocks into Portfolio Under Ambiguity in Stock Information

Abstract

This study uses a hierarchy analysis process under a fuzzy environment to analyze financial factors for stock selection into a portfolio, especially when the decisive factors are too ambiguous to make a straightforward decision. The outcomes of this hierarchy analysis process are weights of each factor that can be used for stock analysis. The score assigned to a stock according to each factor is constructed from the past five-years of financial information (2013-2017). When the current data of the interesting stocks are input and processed, the output will be an overall score that can be used to rank these stocks. An investor can select some stocks into his or her portfolio according to these scores. The stocks that are worth the investment will have a high overall score. This study includes an example of the application of this process to several stocks in Thailand’s stock market (SET50) as a case study.