# Appendix 7 Statistical Tools –Arithmetic Mean –Geometric Mean –Standard Deviation –Correlation –Regression Analysis.

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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   = E ( r n - r ) 2 n - 1 Calculate the variance of Idexx’s stock price.

Correlation R a,b = Covariance of AB (Std.Dev. A)(Std. Dev. B)

Regression Analysis r s = a + b r m + e

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