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Name              Roll No.
Priyank Darji     07
Hardik Nathwani   25
Shashank Pai      26
Sagar Panchal     27
Dharmik Patel     30
Kush Shah         38
Siddarth Tawde    45
STATISTICAL ANAYASIS

Statistical analysis refers to a collection of methods used
to process large amounts of data and report overall trends.

Statistical analysis provides ways to objectively report on
how unusual an event is based on historical data.

Statistical analysis to examine the tremendous amount of
data produced every day by the stock market.
MEASUREMENT OF RETURN

 The rate of return is the total return the investor receives
  during the holding period ( the period when the security
  is owned or held by the investor) stated as percentage of
  the purchase price of the investment at the beginning of
  the holding period.

 The general equation for calculating the total rate of
  return is show below:

              K = D + S.P- P.P
                    P.P
Probabilities are governed by five rules and range from
0 to 1
A probability can never be larger than 1

The sum total of probabilities must be equal to 1

If outcome is certain occure, it is assigned a probability of
1, and impossible outcome are assigned a probability of 0.

The possible outcomes must be mutually exclusive and
collectively exhaustive.

The future return are characterized by uncertain.
EXCEPTED RATE OF RETURN
 The return on an investment as estimated by an asset
   pricing model.
Formula :-
         E(r) = probability * rate of return
For example:-
  If a security has a 20% probability of providing a 10%
  rate of return, a 50% probability of providing a 12% rate
  of return, and a 25% probability of providing a 14% rate
  of return.
• expected rate of return:-
           = (.20)(10%) + (.50)(12%) + (.25)(14%)
           =11.5%.
AVERAGE RATE OF RETURN (ARR)
Definition
Method of investment appraisal which determines return on investment by
totaling the cash flows (over the years for which the money was invested)
and dividing that amount by the number of years.

Example:
Ramesh spent $800,000 to buy an apartment building. After deducting all
operating expenses, real estate taxes, and insurance, he receives $65,000
in the first year, $71,000 in the second year, $69,000 in the third year, and
$70,000 in the fourth year.
Solution:-
Total net earning = 65,000 + 71,000 + 69,000 + 70,000 = 2,75,000
Now divided by 4
 275000/4
=68750
ARR = 68750/800000*100
      = 8.59%
 Standard deviation is a statistical term that measures the
  amount of variability or dispersion around an average.

Definition of 'Standard Deviation‘
 In finance, standard deviation is applied to the annual
  rate of return of an investment to measure the
  investment's volatility. Standard deviation is also known
  as historical volatility and is used by investors as a
  gauge for the amount of expected volatility.
Formula :-


Example :-
FUNDAMENTAL ANALYSIS
 Meaning:-
  Fundamental analysis refers to the study of basic
  fundamental economic indicators which affect the
  country’s economy.
 An investor using Fundamental Analysis to make
  investment decisions will rely heavily on the following
  sources of information:
      Company Balance Sheet

      Income (Profit and Loss) Statement

      Annual report

      Company announcements
Phase 1 :Analysis of Economy wide factor

Economic fundamental provide the most significant
information to traders. The impact of economic data tends to
be long term oriented. Economic indicators are reports
published at a fixed time intervals by government and private
organizations.

Here are some lists of economic report that have most
significant impacts on the market:
    Gross Domestic Product (GDP)

    Gross National Product (GNP)

    Inflation report

    Interest rate
Phase 2 :Analysis of Industry wide factor

Study of industry life cycle
The industry life cycle is made up of the following
stages:
   1. Pioneering Phase
   2. Growth Phase
   3. Mature Growth Phase
   4. Stabilization/Maturity Phase
   5. Deceleration/Decline Phase
CONTD…
Study of qualitative and quantitative factor:-

   1. Economies of scale

   2. Capital Requirements

   3. Government Regulation

   4. Business Model

   5. Management Team
Phase 2 :Analysis of Company wide factor
This is usually done by studying the company's financial
statements. From these statements a number of useful ratios
can be calculated.

    P/E Ratio

    Book Value Per Share

    Current Ratio

    Debt Ratio
TECHNICAL ANALYSIS
• Meaning
  Technical analysis is a method of evaluating securities
  by analyzing the statistics generated by market activity,
  such as past prices and volume.

• The field of technical analysis is based on three
  assumptions:

  1.The market discounts everything.

  2. Price moves in trends.

  3. History tends to repeat itself.
TYPES OF CHARTS

1) Bar Charts
2) Line Charts
3) Candlestick Chart
BIBLIOGRAPHY

 www.investopedia.com

 www.trade-ideas.com

 www.ikofx.com

 Risk management book
Statistical analysis

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Statistical analysis

  • 1.
  • 2.
  • 3. Name Roll No. Priyank Darji 07 Hardik Nathwani 25 Shashank Pai 26 Sagar Panchal 27 Dharmik Patel 30 Kush Shah 38 Siddarth Tawde 45
  • 4.
  • 5. STATISTICAL ANAYASIS Statistical analysis refers to a collection of methods used to process large amounts of data and report overall trends. Statistical analysis provides ways to objectively report on how unusual an event is based on historical data. Statistical analysis to examine the tremendous amount of data produced every day by the stock market.
  • 6. MEASUREMENT OF RETURN  The rate of return is the total return the investor receives during the holding period ( the period when the security is owned or held by the investor) stated as percentage of the purchase price of the investment at the beginning of the holding period.  The general equation for calculating the total rate of return is show below: K = D + S.P- P.P P.P
  • 7. Probabilities are governed by five rules and range from 0 to 1 A probability can never be larger than 1 The sum total of probabilities must be equal to 1 If outcome is certain occure, it is assigned a probability of 1, and impossible outcome are assigned a probability of 0. The possible outcomes must be mutually exclusive and collectively exhaustive. The future return are characterized by uncertain.
  • 8. EXCEPTED RATE OF RETURN  The return on an investment as estimated by an asset pricing model. Formula :- E(r) = probability * rate of return For example:- If a security has a 20% probability of providing a 10% rate of return, a 50% probability of providing a 12% rate of return, and a 25% probability of providing a 14% rate of return. • expected rate of return:- = (.20)(10%) + (.50)(12%) + (.25)(14%) =11.5%.
  • 9. AVERAGE RATE OF RETURN (ARR) Definition Method of investment appraisal which determines return on investment by totaling the cash flows (over the years for which the money was invested) and dividing that amount by the number of years. Example: Ramesh spent $800,000 to buy an apartment building. After deducting all operating expenses, real estate taxes, and insurance, he receives $65,000 in the first year, $71,000 in the second year, $69,000 in the third year, and $70,000 in the fourth year. Solution:- Total net earning = 65,000 + 71,000 + 69,000 + 70,000 = 2,75,000 Now divided by 4 275000/4 =68750 ARR = 68750/800000*100 = 8.59%
  • 10.  Standard deviation is a statistical term that measures the amount of variability or dispersion around an average. Definition of 'Standard Deviation‘  In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility.
  • 12.
  • 13. FUNDAMENTAL ANALYSIS  Meaning:- Fundamental analysis refers to the study of basic fundamental economic indicators which affect the country’s economy.  An investor using Fundamental Analysis to make investment decisions will rely heavily on the following sources of information: Company Balance Sheet Income (Profit and Loss) Statement Annual report Company announcements
  • 14. Phase 1 :Analysis of Economy wide factor Economic fundamental provide the most significant information to traders. The impact of economic data tends to be long term oriented. Economic indicators are reports published at a fixed time intervals by government and private organizations. Here are some lists of economic report that have most significant impacts on the market:  Gross Domestic Product (GDP)  Gross National Product (GNP)  Inflation report  Interest rate
  • 15. Phase 2 :Analysis of Industry wide factor Study of industry life cycle The industry life cycle is made up of the following stages: 1. Pioneering Phase 2. Growth Phase 3. Mature Growth Phase 4. Stabilization/Maturity Phase 5. Deceleration/Decline Phase
  • 16. CONTD… Study of qualitative and quantitative factor:- 1. Economies of scale 2. Capital Requirements 3. Government Regulation 4. Business Model 5. Management Team
  • 17. Phase 2 :Analysis of Company wide factor This is usually done by studying the company's financial statements. From these statements a number of useful ratios can be calculated.  P/E Ratio  Book Value Per Share  Current Ratio  Debt Ratio
  • 18. TECHNICAL ANALYSIS • Meaning Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. • The field of technical analysis is based on three assumptions: 1.The market discounts everything. 2. Price moves in trends. 3. History tends to repeat itself.
  • 19. TYPES OF CHARTS 1) Bar Charts
  • 22.