Stock Markets:An investigation of Causes of
change
Pete mason
Project outline
• What are some causes of changes or fluctuations in various world stock markets?• Do CPI values have anything to do with
increases or decreases in a stock market, or visa versa?
• Do different international markets affect each other?
Results
• 3 Areas of focus:• Market’s influence on
each other
• Combined Markets’ influence on combined CPI values
• Individual Market’s influence on their native CPI
• Looking for any comparisons or similarities
Markets vs Each Other
Market Relative Variation
80%
130%
180%
230%
280%
330%
380%
01/10/90 01/10/94 01/10/98 01/10/02
DAX Relative Variation
NASDAQ Relative Variation
TSE Relative Variation
FTSE Relative Variation
Markets vs Each Other
Market Relative Variation
180%
230%
280%
330%
380%
01/06/99 01/03/00 01/12/00 01/09/01
DAX Relative Variation
NASDAQ Relative Variation
TSE Relative Variation
FTSE Relative Variation
Markets vs Each Other: USA vs Canada
Correlation of NASDAQ and TSE
R2 = 0.9431
50%
100%
150%
200%
250%
300%
350%
400%
80% 130% 180% 230%
NASDAQ vs TSE
Linear (NASDAQ vsTSE)
Markets vs CPIsCumulative Market Change vs Cumulative
CPI Change
100%125%150%175%200%225%250%275%300%
Dec-9
0
Dec-9
2
Dec-9
4
Dec-9
6
Dec-9
8
Dec-0
0
CumulativeMarket RelativeChange
Cumulative CPIRelative Change
Markets vs CPIs
Correlation of Cumulative Market Change and CPI Change
R2 = 0.9204
100%
150%
200%
250%
300%
120% 125% 130% 135% 140% 145% 150%
Cumulative CPI Change
Cu
mu
lativ
e M
ark
et
Ch
an
ge
Market Change vsCPI Change
Linear (MarketChange vs CPIChange)
Conclusion
• Obviously a link between CPIs and Stock Market values• What the link is is as of yet unclear
• How the two are related is also unclear
• The most obvious conclusion:• The influences are the same, but the two may or
may not directly, or indirectly affect each other
@
Fin.
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