Relationship between volatility of stock prices and the level of stock prices; a case study on Kenya bourse.
The study investigates the relationship between stock price level and the deviation of the stock prices of selected listed companies at the Nairobi Securities Exchange (NSE), Kenya. It seeks to understand given the stock level prices let say Kes. 5 and Kes. 100 which stock will an investor with ability willingly invest in. Does the two stocks provide a similar deviations? The study therefore answer the following questions; is their relationship between the level of stock prices and variability of stock prices, how does low-priced and high-priced stocks deviate and finally given some stake which stock level will an able investor commit his funds that is, the study sought to identify the role of level of stock prices in making investment decisions whether it is better to invest in low stock prices or high priced stocks. The literature showed that researchers have conflicting conclusions, in that some claimed there exists. Some relationship between the level of stock price and the volatility, of the stock prices, while others concluded that there is no role of stock price level on stock prices deviations.