Estimation of Granger Causality Verification and Error Modification Model for Empirical Analysis on Risk-Free

Many researchers have studied on stock index futures before the launch of stock index futures in China, but the study subjects of most of the literatures are simulated trading and the original two contracts. Because there were still a great many problems existing when stock index futures just came on the market, some of the research results then has been in inconsistent with market conditions today. Therefore, research of stock index futures based on the latest data is of great importance. The paper analyzes index of IF1103contract as well as price movements of HS300 index during the same period, and studies the feasibility and risk factors of risk factors applied in investment portfolios in China from two aspects, hedging and risk-free arbitrage. The paper applies empirical research and draws conclusions that futures guiding spot and arbitrage profit of stock index futures reduce dramatically compared with the initial launch of stock index futures, and proposes several recommendations on the development of stock index futures in China.