Overview
For this project we will make use of the same data your obtained from the financial website
https://finance.yahoo.com/ (Links to an external site.)
To begin you will one to select two stocks and download two data sets ( e.g. the first one to represent the "classical economy" and the second one to represent the "modern economy... for my class example that'd be XOM 'Exxon Mobil" the oil company for the classical & EVGO "EvGO" the EV charging company for the modern economy ). Please note for the latter part of this assignment - when you create the probability function - you will then only be using the data of the second one ( e.g. the latter analysis will be on your chosen stock that you believe represents a new modern changing economy ).
Now, to begin you should go to the yahoo finance ( or any other financial website you desire to use ) and download the last year's data of the closing price for each company. Then you should compute, for both data sets, the
- The descriptive Stats
- Mean
- Variance
- And create a plot
For, for the second portion of this assignment you will create a normal density functions, using the above mentioned data for only the second "modern economy" stock,
12???e?12(x??)2?212??e?12(x??)2?2
and then graph your density function perhaps using a free online program such as desmos.
NOTE: if you have a high value of variance your graph will have a very small height, so it maybe better to just plot the core function
e?12(x??)2?2e?12(x??)2?2
Then, you should provide a forma written "report" to answer the following question, based on intuition about your density function
For your submissions you should upload a 2 page document including
- Page 1:Introduction, including a general explanation of the company ( e.g. what it does and why you would think it would be a good investment )
- It would be nice here to show some small visuals, maybe the historical plot of the company's stock price ( or revenue / CF )
- Page 1: a quick summary explaining what a normal density, and then show the normal density function obtained from your data.
- When compared to the standard normal, how does yours's differ. For example, is it more spread out?
- It would ne nice here to show some small visuals, like the normal plots we did in the prior class disc example in desmos
- Page 2: Can this normal density function be used to compute the probability that the future value of this stock is higher than a certain prescribed value?
- Say for example, could it be used to find the probability that the stock's value is $10 more than the current value?
- Or what if we had a data set that had the mean = ?? can we just do the probability computation P(x>?)P(x>?) like we did class examples
- e.g. ( ??x=??x=?? )
- why or why not? And is there a difference between our "mathematical results" and real world interpretation??
- NOTE: while it is not required to discuss this at the current time - it will be the core topic on end of semester project - if you answered no to the above question, what could be used to predict the future value of this stock??
For uploads: is is preferred that you upload a singe documents ( ideally in singe word document ) with things form eternal programs - such as equation expressions or images - pasted into the word doc as screenshots.