Install the Analysis Toolpak (ATP) AddIn. Bin 2: (μ - 1σ) Analysis > Data Analysis.In this example, four bins are used to count the frequency values:
In finance, it is often assumed that the stock returns series is normally distributed. In addition to the data summary provided by the descriptive statistics, an analyst might be interested in the number of returns above or below the average, or within plus or minus one standard deviation.Ī frequency table tells us how often values occur in a table. A formula is used for the arithmetic Range statistic in cell F9.įigure 1. Each statistic is returned by an Excel function. The daily closing prices Cprice are in column B, and the daily log returns LogR in column C are returned by the Excel LN function.ĭescriptive statistics are shown in the range E7:F15. We start with a list of stock prices and returns for a major Australian retailer over one month period for November 2012 Frequency table of the data from bin counts
The Excel version is available in the Part 1 worksheet of the associated file.ġ.1. The table is setup by counting bin values, then using the Excel Analysis Toolpak and finally, the Excel FREQUENCY function. Part 1 provides an introduction to frequency tables and histogram chart. A histogram of stock returns with normal curve overlayĪ histogram is a graphical representation of the frequency distribution of a set of data.
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