Calculate the monthly returns for each stock

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Reference no: EM133423695

Question: In this assignment you will conduct time series analysis of the financial data.

1. Setup your environment to access and download latest stock data. Please see instructions below for different tools you can use to get the data. You can use any of the options provided, either Quandl or Yahoo Finance. If you know of any other service to download the data, please use that service, provide an explanation in the comments.

2. Download the **adjusted** close prices for FB, MMM, IBM and AMZN for the last 60 months. If you run into any issues downloading the data from online sources, you can use `.csv` files provided. This will not affect your grade for the assignment.

3. Resample the data to get prices for the end of the **business** month. Select the **Adjusted Close** for each stock.

4. * Use the pandas `autocorrelation_plot()` function to plot the autocorrelation of the adjusted month-end close prices for each of the stocks.
- Are they autocorrelated?
- Provide short explanation.

5. *
- Calculate the monthly returns for each stock using the "shift trick" explained in the lecture, using `shift()` function.
- Use pandas `autotocorrelation_plot()` to plot the autocorrelation of the monthly returns.
- Are the returns autocorrelated? Provide short explanation.

6.
- Combine all 4 time series (returns) into a single DataFrame,
- Visualize the correlation between the returns of all pairs of stocks using a scatter plot matrix (use `scatter_matrix()` function from `pandas.plotting`).
- Explain the results. Is there any correlation?

Reference no: EM133423695

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