Regression Analysis of Verizon Communications, Berkshire Hathaway, and Wyndham Worldwide
Business and Management
Submitted By tad004
Regression Analysis of Verizon Communications,
Berkshire Hathaway, and Wyndham Worldwide
The stock market plays a pivotal role in the world today, bringing together investors with companies looking to raise funds. The government, organizations, and individual shareholder’s all have a stake in actively following and participating in the stock market. The problem that hinders common traders and professional investors alike becomes differentiating between the thousands of publicly traded companies in the U.S. alone to pick the best investments. By comparing three large, but very different companies to the market as a whole this paper will demonstrate how Beta can be used to measure the volatility of a stock.
The three dependent variables will be acquired from historical stock returns from the communications conglomerate Verizon Communications (VC), Berkshire Hathaway Inc. (BRK-A) the multinational holding company best known its chairman Warren Buffet, and Wyndham Worldwide Corporation (WYN) one of the world’s largest hotel and resort chains. After comparing relevant statistical factors to each other a regression analysis will be done for each company comparing the excess market returns for each company (found by subtracting out the market free rate) to the market excess return.
Table 1: Stock Return Statistics | Average Price/Share | Mean Return | Largest Gain | Largest Loss | Standard Deviation | Coefficient of Variation | VZ | $34.73 | 1.43% | 12.58% | -10.07% | 4.83% | 338.98% | WYN | $38.623 | 6.50% | 178.13% | -16.46% | 23.74% | 365.44% | BRK-A | $128,891.78 | 1.39% | 11.52% | -8.16% | 4.61% | 330.58% |
Data was acquired from the stock price and returns for 60 months beginning Mar 2009
Stock price can be a misleading benchmark for similarities between stocks. In Table 1 shown above, Berkshire Hathaway costs over 3,500 times more than…...