Reference no: EM132964667

Question 1
Import the attached stock price data into R, and compute its autocorrelation along with the Durbin-Watson test statistic. Does there appear to be any? In general, if one could deduce to what order stock data is autocorrelated, could you come up with some investment strategy to follow that information? Can you research stocks that indeed are autocorrelated?

Submit your code and any output of the code to include tables and graphs as indicated. Submission of R code can be accomplished by creating a markdown document in RStudio and saving this as a .txt file. Submission of mathematical proofs can be accomplished using Microsoft Word's equation creator, LaTeX, or neatly written work that has been scanned into PDF format. For questions that require a written response, use no fewer than three complete sentences or 50 words.

Questions here are intended to provoke substantive discussion involving you, your peers, and the instructor; review the course requirements for quantity and quality of responses expected, and use this as a basis for fulfilling them.

Question 2
Similar to stocks, knowing time-series correlation for sales data can be incredibly valuable as well. Suppose a man has a hot dog stand called PCA Hot Dogs and he would like to know how it is doing relative to industry-wide performance of all hot dog stands. The sales data for PCA Hot Dogs is attached. Construct a simple linear regression for PCA Hot Dogs' sales to industry sales, and plot the residuals over time. Use the Durbin-Watson test to determine whether there is positive autocorrelation in the errors. Draw conclusions about the existence of autocorrelation and use them to inform on the performance of PCA Hot Dogs. Include a correlogram.

Follow-Up Discussion: Other than the simple linear time regression, what other models might we consider here to better fit this data? What business questions might we ask next after these analyses?

Submit your code and any output of the code to include tables and graphs as indicated. Submission of R code can be accomplished by creating a markdown document in RStudio and saving this as a .txt file. Submission of mathematical proofs can be accomplished using Microsoft Word's equation creator, LaTeX, or neatly written work that has been scanned into PDF format. For questions that require a written response, use no fewer than three complete sentences or 50 words.

Questions here are intended to provoke substantive discussion involving you, your peers, and the instructor; review the course requirements for quantity and quality of responses expected, and use this as a basis for fulfilling them.

Attachment:- Assignment Question.rar