%0 Journal Article %T An Analysis of Centrality’s Features as a New Measure for Network Analysis, Risk Measurement & Portfolio Selection %J Financial Research Journal %I University of Tehran %Z 1024-8153 %A Fallahpour, Saeed %A Ghahramani, Ali %D 2021 %\ 08/23/2021 %V 23 %N 2 %P 158-171 %! An Analysis of Centrality’s Features as a New Measure for Network Analysis, Risk Measurement & Portfolio Selection %K : Centrality %K Centrality based Strategy %K Financial market network %K Portfolio Selection %R 10.22059/jfr.2018.241407.1006515 %X   Objective: In network theory, centrality is a measure to estimate importance and influence of a special node to the whole network structure. The aim of this research is to investigate the characteristics of stock centrality and its reliability in risk estimation and portfolio selection. Methods: First in this paper, we analyzed the relationship between stock’s centrality & benchmark risk estimation measures like beta & standard deviation. Then, we analyzed the relationship between stock’s centrality & Markowitz framework’s weights; and finally, we introduced centrality-based portfolio selection strategy and compared it with other benchmarks, by different portfolio performance measures. Results: Our observations indicate that in Tehran stock exchange, centrality can have an effective role in stocks risk estimation and there is a meaningful relation between centrality and other measures. We also observed that out that low central stocks can raise the benefits of portfolio diversification, and centrality-based portfolio selection method can have a better performance than other benchmark portfolio selection methods and results in a better risk adjusted return. Conclusion: Stock centrality, as a measure to estimate importance and influence of member of a network, is capable of describing stock risk characteristics like other accepted measures. We can take advantage of this capability for portfolio selection. %U https://jfr.ut.ac.ir/article_83580_de80b7f52d375b358d28ed8b4ee9a061.pdf