Comparing the Accuracy of Ohlson and Piotroski Models in Explanation Stock Prices Changes in Tehran Stock Exchange

Document Type : Original Article

Authors

1 Assistant Prof. Faculty of Economic and Management, Semnan University, Semnan, Iran

2 MSc. in Business Management(Finance), Faculty of Economic and Management, Semnan University, Semnan, Iran

Abstract

Stock valuation using valid scientific methods will lead to optimal investment decisions and optimal allocation of capital resources. Therefore, in order to encourage investors to invest more in financial markets, continuous pricing models should be explored and appropriate models identified and introduced. The purpose of the present study is to compare the accuracy of the Piotroski model compared to the Olsen model in explaining the price changes of the stock listed in the Tehran Stock Exchange. The statistical population of this study is all companies accepted in Tehran Stock Exchange from 2010/3 until 2017/3. The data are obtained by referring to the capital market information data bases. The findings of the research indicate that both Olsen and Piotroski's models are able to explain stock price changes in Tehran Stock exchange. By comparing the accuracy of the two models, it was determined that the accuracy of the Piotroski model in explaining stock price changes in the Tehran Stock Exchange is more than the Olsen model. By comparing the accuracy of the two models, we found that the Piotroski model has a better performance than the Olsen model in explaining stock price changes in the Tehran Stock Exchange.

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