The Impact of Trading Volume on Stock Price Volatility

In the capital markets, research on the impact of market trading volume on asset prices and returns has been ongoing since the 1960s, and remains a focus of attention for scholars and investors both domestically and internationally. Studies on the relationship between volume and price primarily concentrate on the volatility of stock prices in relation to trading volume, and the correlation between stock return rates and trading volume. In empirical research on the volume-price relationship, the main theories are inseparable from the study of market information. Trading volume encompasses the market's reaction speed to information and the extent of information's impact on the market, which are significant reasons why trading volume can affect stock market prices and returns.