Modelling the Cognitive Financial Group Interconnected Risk Network

Document Type: Research Paper

Authors

1 Department of Mathematics, Faculty of Mathematics, Statistics & Computer Science, Semnan University, Iran

2 Institute for Mathematical Research, University Putra Malaysia, Serdang, Selangor, Malaysia

10.22075/ijnaa.2020.4275

Abstract

In this paper, the new methodology of interconnection network among the various corporations which
are the members of a single nancial group is studied and developed. For the rst time, each company
is observed individually and the cognitive risk factors of each are monitored by new introduced
indexes. The risk contagion effect on the main node of the holding is calculated respectively. The
new indexes help the management to monitor the entire nancial group performance. Also guide the
main node of the holdings to make appropriate decisions relating to any investment, pro t returning
and risk of the nancial group nodes. It is shown, if a company defaults to meet its obligations,
how much this will affect the other companies of the network and the main node of the holding.
With the use of new developed methodological indexes, the topology of the nancial group network
is displayed graphically for the rst time and the mathematical structure is developed as well.
Finally, the illustrative results are apparent in a new introduced software which is coded and tested
with real data and the results show high accuracy.

Keywords