Impact Of Political Event On Trading Volume And Stock Return In Pakistan: An Correlation Analysis Of KSE 100 Index Sidra Malik*, Shahid Hussain**, Shakil Ahmed*** Aim: This paper examines the relationship between aggregate stock market trading volume and of daily stock returns during 1 st July 2008 to 30 th Sep 2008 on KSC 100 index, in order to evaluate the impact of non-informational trade due to events and how stock returns moved too much due to change in the trading volume. The hypothesis of the study states “There is impact of political events on stock volume and trading volume”. Methodology: The time horizon of the study is time series analysis with a setting of field study. We employ Phillips Perron unit root test to investigate the relationship between trading volume and stock returns using the daily logarithmic returns and change in volume during the period 15th July 2008-15 th Sep 2008. Results: It indicates that stock returns moved too much due to change in the fundamentals, aggregate expected returns, and changes in effective risk aversion of market participants. The same results found in the pre-resignation period of Ex President Pervez Musharaf (1 st July 2008-15 th Aug 2008) and the post-resignation period of Ex President Pervez Musharaf (18 th Aug 2008- 30 th Sep 2008).The post- resignation period indicates more positive correlation as compared to pre- resignation period, correlation from 0.470 to 0.873 Regression from .594 to 21.34 the PP test gave Log of return -7.94 Stationary and Difference of log volume -14.45 Stationary. Conclusion: Political events affect the stock price due to which the trading volume and stock return fluctuate positively or negatively as per the intensity of the event. Keywords: Return, Stock Price, Phillips Perron Unit Root Test, Correlation, Stock Return And Trading volume Field of Study: Finance __________________________ * Sidra Malik*, Student BS (BA)-V, Department of Management Sciences, COMSATS Institute of Information Technology, 43600, Attock Campus, Pakistan ** Shahid Hussain, Lecturer, Department of Management Sciences COMSATS Institute of Information Technology, 43600, Attock Campus, Pakistan *** Shakil Ahmed, Lecturer, Department of Management Sciences COMSATS Institute of Information Technology, 43600, Attock Campus, Pakistan Email: sidramalik2987@yahoo.com ; Shahid_hussian@comsats.edu.pkL ; onlyshakil@gmail.com