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Application Case for Project 1:
Descriptive statistics for analyzing behavior of stock exchanges
I have
taken data of Monthly Closing Points of NASDAQ and DJIA for last two years and have correlated the movements of both exchanges.
I have also found out the summary measures for selected variables in respect of both Exchanges, which include, Mean, Median,
Standard Deviation, Minimum and Maximum of closing points in respect of both exchanges:
In respect of NASDAQ, the
summary shows that the highest closing point was 4696.690, which was the closing point of Feb, 2000. The minimum point was
1498.800, which was closing point of September, 2001. Thus even before the terrorist attacks of September,11 the stock exchange
had started showing signs of economic depression and market recession. Recent trends show that after rising to 1950.40 as
on December,1 it again started falling and in January, 2002, it reached to 1934.03, approximately at the level of November,2001.
Before this, the NASDAQ was closing almost at same level during December, 2000 to August, 2001, at around 2000 points.
However from September, 2001 and October, 2001, there was loss of around 400 points. But again from November and onwards it
started to climb up, which trend has more or less been maintained.
Summary measures for selected variables
Close
Count 24.000
Mean 2773.754
Median 2315.530
Standard deviation 1003.278
Minimum 1498.800
Maximum 4696.690
Range 3197.890
Variance 1006566.279
In respect of DJIA, the summary measures for selected variables are as under:
Summary measures for selected variables
Close
Count 24.000
Mean 10371.458
Median 10512.200
Standard deviation 576.163
Minimum
8847.560
Maximum 11215.100
Range 2367.540
Variance 331963.615
The above series shows that index was almost at same closing point, with slight improvement, during the period of December,2000
to August, 2001. However in September, 2001, it fell sharply, by 1000 points. During September, October and November,2001,
there were large fluctuations, because of uncertain conditions in US market, on account of attacks on Terrorism and war with
Taliban led Afghanistan Government.
Thus the fluctuations in closing points of both NASDAQ and DJIA are similar during the same time periods. These points reflect
the actual movement of market sentiments during the corresponding time periods. However the slopes in respect of DJIA are
not as sharp as in respect of NASDAQ. This is because of very high difference in the level of closing points of NASDAQ and
DJIA. The highest closing point in respect of DJIA being very high, at 11215.100 against the highest closing point in respect
of NASDAQ at 4696.690.
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