Analysis of the Mechanism by Which Investor Sentiment Affects Stock Market Volatility
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Keywords
investor sentiment, stock market volatility, market mechanism, behavioral finance, heterogeneity effect
Abstract
As a core topic in behavioral finance, investor sentiment and its impact mechanism on stock market volatility have always been a research hotspot in the financial field, serving as a key path to explaining market phenomena. Based on relevant empirical research in recent years, this article first systematically reviews the development process of investor sentiment and its impact on stock market volatility. On this basis, it focuses on analyzing the transmission pathways, boundary conditions, and heterogeneous effects of sentiment on stock market volatility. It also collates traditional econometric methods and text analysis techniques driven by large language models, clarifying the differentiated characteristics of investor sentiment under different market environments. Finally, this paper points out the deficiencies and limitations of current research on investor sentiment, and looks forward to the future where artificial intelligence technology empowers the study of investor sentiment towards high-frequency dynamics and multimodal fusion, aiming to provide theoretical references for risk management and investment decisions of market participants.
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