ACCO1169 Quantitative Methods, Report , UK

Assignment Brief:

As a junior equity analyst, your primary responsibility is to support the fund manager in analysing the share price performance of companies that are publicly listed on the stock exchange. This involves conducting a comprehensive assessment of the various factors that influence the stock prices, including financial performance, market trends, economic conditions, competitive landscape, and other relevant variables that may impact investor sentiment and market perception.

To fulfil this task, you are required to select a company from the list provided in the appendix. Once a company has been chosen, you should undertake a thorough analysis of its share price performance, identifying key drivers and events that have contributed to its historical trends. Your report should also consider external and internal factors that might have influenced the company’s market performance,such as changes in industry dynamics, macroeconomic shifts, regulatory developments, or company-specific news and financial disclosures.

You are expected to compile your findings into a detailed report of 1500 words (+/-10%), adhering to the specific guidelines outlined below. Your report should be structured to provide a clear, well-supported analysis that will aid the fund manager in making informed investment decisions. 

1. Introduction 
2. Stock Selection and Rationale : Select a company listed in appendix. Provide a rationale for the stock selection, considering industry trends, market conditions, or any other relevant factors.
3. Data Collection and Compilation : Collect monthly closing prices of your chosen stock and calculate the monthly changes in prices. Total number of observations should be at least 60. Briefly describe the process of collecting and organising historical stock data.
4. Descriptive Statistics and Trend Analysis : Calculate and analyse descriptive statistics for the change in stock prices, including mean, median, standard deviation, and any other relevant metrics. Utilise charts to visually represent trends over the selected time period.
5. Correlation and Regression Analysis : Choose one external factor (e.g. stock index, interest rate, economic data, etc) and examine correlations between the stock's performance and the factor.
Explain the rationale of the external factor chosen. Conduct regression analysis to model the stock's performance based on the selected external factors (independent variable). Interpret the result.
6. Hypothesis Testing: Your fund manager expects you to test one of the following:
i) whether the correlation coefficient you estimated in part 5 is statistically significant
ii) whether the average monthly stock price change is above zero. 
Perform the hypothesis testing following the steps discussed in class, using a significant level of 5%.
7. Discussion and Interpretation : Discuss the implications of the descriptive statistics, trend analysis, correlation, regression, and hypothesis testing results.
8. Recommendations and Future Outlook : Provide actionable recommendations for potential investors based on the analysis. Discuss potential future trends or events that may impact your selected stock.
9. Conclusion : Summarise key insights and reflect briefly on the significance of findings.
10. References: List at least ten sources that you have used to build your arguments in the report. All sources of material used must be properly referenced. The main styles used in the University of Greenwich are Harvard, Harvard APA and British Standard (Numeric - also known as footnoting)

Learning outcomes:

1. Apply basic quantitative methods in the analysis of problems arising in a business management context
2. Use computer packages to support completion of the tasks set
3. Use quantitative techniques to carry out an investigation into a financial problem put in the form of a case study
4. Write an effective report