Vol. 20, N°2 (2025)

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The impact of Overconfidence Bias on the Volatility of the French Stock Market: The Case of CAC ALL TRADABLE

Résumé

This paper examines the impact of investors' overconfidence bias on excess trading volume and excessive volatility in the French stock market. Using data from companies listed on the CAC All Tradable index of the Paris Stock Exchange from 2005 to 2022. We apply Granger causality tests to analyze the direction of causality between returns and trading volume. The VAR analysis reveals a positive relationship between past returns and current trading volume, suggesting that overconfident investors execute transactions more frequently following market gains. Furthermore, the GJR-GARCH model is used to analyze volatility, and the results show that investors' overconfidence bias is associated with increased return volatility. These findings have important implications for market regulation, investment management, and market efficiency.

Comment citer cet article

Hanen FEKI & Siwar ELLOUZ (2025), " The impact of Overconfidence Bias on the Volatility of the French Stock Market: The Case of CAC ALL TRADABLE", International Journal of Management And Technologies, Vol.20, N°2, pp: 136-161