Tech Stock Market Data Analysis

There is a big dip in March 2020 due to COVID-19, the lowest point was on 03/23/2020 but the adjusted close price was still better than the year prior. During that period, there was a spike in stock trades, probably due to panic trading.

2.Moving Averages

a. AAPL moving averages

Overall, recently the adjusted close is higher than all the moving averages, especially the moving average for 50 days. It looks like everything is recovering with the uptrend.
The shorter moving averages crossed above the 50 days one during late April suggested an uptrend and a good buying period
Investing in AAPL still looks like a great investment despite of COVID-19 as the stock adj close has an uptrend overall

b. AMZN moving averages

AMZN stock had an critical uptrend after COVID-19. My guess is that people are relying on online shopping improving amazon's profit. All shorter periods of moving averages and the immediate adjusted close price trend are way higher than the moving average for 50 days

c. GOOG moving averages

Google seemed to suffer the biggest dip. GOOG is recovering but still has not hit where it used to be. It looks like it's on the right track to hit their previous max soon

d. MSFT moving averages

MSFT also had a dip during 03/2020 but has recovered like other big tech companies

3.Daily Return

The daily returns of all 4 big tech companies were stable until 03/2020 where the variations were huge (gain or lose more than 10% daily). Daily returns are stabilizing.

4.Correlations between these stocks

a. Daily Return Correlations

It makes sense that these big tech stocks have positive correlations with each other. Nonetheless, it looks like AMZN has weaker correlations with the other companies.

On average, these stocks return around 0.18% daily with AAPL has the highest return.

b. Closing Price Correlations

There are correlations between GOOG and AAPL, AAPL and MSFT, GOOG and MSF (with a bigger linear regression residue).

AMZN's closing price has a positive correlation with other companies as well, but not as strong.

AMZN closing price distribution is more skewed to the right than others.

Closing Price wise:

There are strong positive correlations between GOOG and AAPL, MSFT and AAPL, GOOG and MSFT.

Again, AMZN has the weakest correlations with others

5.Value risks

a.Risk vs Expected Return

Normally we would look for stocks with high expected return and lower risk but life is not perfect. On the bright side, all of these stocks have a positive expected return.

AMZN has the lowest risk but the expected return is not as google as MSFT and AAPL.

GOOG seems quite high risk with low expected return for the current year.

AAPL is a go big or go home this year

b.Bootstrap Method

The 0.05 quantile:

For example, if your 0.05 quantile is -0.033

95% of the time, your worst daily lost wouldn't exceed 3.3%.

For example, if we have $1,000,000 of investment, our daily investment would not exceed $1,000,000*3.3\% = $ 33,000 for 95\% of the time.

Your value at risk is 3.3% of your investment

Value Risks 95% confidence interval:

AAPL: 3.31%
AMZN: 2.77%
MSFT: 3.31%
GOOG: 3.46%

c. Monte Carlo Method

Predicting the outcome using thousands of simulations

GOOG

Histogram of all the final prices through 10,000 simulations.

Start Price is $1134

Mean final price is $1136.62: this is a stable stock as we saw before but the expected return is quite low

Value at Risk: 99% of the time, the most you will lost is $56.78 or the stock price is at $1077.22

AAPL

Histogram of all the final prices through 10,000 simulations.

Start Price is $320.33

Mean final price is $322.11: this is a stable stock as we saw before but the expected return is quite low

Value at Risk: 99% of the time, the most you will lost is $16.9 or the stock price is at $303.38

MSFT

Histogram of all the final prices through 10,000 simulations.

Start Price is $183.37

Mean final price is $183.99: this is a stable stock as we saw before but the expected return is low

Value at Risk: 99% of the time, the most you will lost is $9.89 or the stock price is at $173.48

AMZN

Histogram of all the final prices through 10,000 simulations.

Start Price is $2443.29

Mean final price is $2449.20: this is a stable stock as we saw before but the expected return is higher than other stocks in this analysis

Value at Risk: 99% of the time, the most you will lost is $104.25 which is riskier compared to other stocks on this list

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