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.