Stock Analysis and Means Calculation Tool
Utilize statistical tools like arithmetic mean, geometric mean, and weighted average to assess your stock investments. Calculate variance, correlation, and regression analysis for informed decision-making.
Stock Analysis and Means Calculation Tool
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Presentation Transcript
Appendix 7 • Statistical Tools • Arithmetic Mean • Geometric Mean • Standard Deviation • Correlation • Regression Analysis
You own 100 shares of IBM which is selling at $96, 200 shares of Disney which is trading at $106, and 500 shares of Iddex which is trading at $15. • Calculate the arithmetic and geometric means for these stocks. • Calculate the weighted average for these stocks.
Arithmetic Mean • 96 + 106 + 15 = $72.33 • 3 • Geometric Mean • {96 * 106 * 15 }1/3 = $53.44 • Weighted Average • (100 * 96) +(200 *106) + (500 * 15) = $47.875 • 800
Example of Arithmetic vs. Geometric • Year Price of Idexx • 0 $ 15 • 1 $20 • 2 $17 • 3 $25 • Calculate the percentage change in the price of Idexx each year. • Calculate the Arithmetic and Geometric means.
Variance • s2 = E ( rn - r )2 • n - 1 • Calculate the variance of Idexx’s stock price.
Correlation • Ra,b = Covariance of AB • (Std.Dev. A)(Std. Dev. B)
Regression Analysis • rs = a + b rm + e
