Maths Project

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I would like to thank our teachers, John Sir and Pawan Sir, for their support and guidance
throughout this project. I’m grateful for this team as this wouldn't be possible without them, they
made the research process easier and engaging for everyone. Lastly, I would like to
acknowledge Yahoo Finance, NSE India and ChatGPT (for all formula diagrams), they are
reliable online websites whose data and information were used to derive conclusions and shape
our research analysis. Thank you.

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Stock market sectors :

Stock market sectors are like groups of companies that do similar businesses. It is basically like
categories to organise companies. This helps investors stay informed about how different parts
of the economy are performing and make informed investment decisions.

11 main sectors :

1. Energy: distribution of resources like oil and gas companies, exploration companies|
Example: Reliance Industries

2. Materials: Companies focused on extraction of minerals like metals chemicals and

construction material| Example: Tata steel

3. Industrials: Manufacturing and engineering services-based companies| Example: Larsen

and Toubro

4. Utilities: Businesses providing basic needs like electricity, water and gas| Example: Tata
Power

5. Healthcare: Companies involved in the development and provision of healthcare products

and services, including pharmaceuticals, medical devices, and hospitals| Example: Sun Pharma

6. Financials: Businesses that provide financial services, like banking, insurance and
investments| Example: HDFC bank

7. Consumer Discretionary: Companies that sell non-essential goods, like entertainment and
leisure| Example: Titan
8. Consumer Staples: Companies that sell essential goods, like food, beverages and
household products| Example: Nestle

9. Information and technology: Companies that produce computer hardware, software and all
similar services| Example: Infosys

10. Communities Service: Companies that provide telecommunications and media| Example:
Bharti Airtel

11. Real Estate: Companies involved in the ownership, development and management of real
estate| Example: Godrej Properties

Why Sector-based analysis matters:

Not all of these sectors will perform well all the time. Each of these sectors are uniquely affected
by recent events, economic conditions, government policies, consumer demand. By analysing
the performance of each sector an investor can make a calculated decision for their next
investment with the least risk and greatest odds of profit. For example, if the average IT sector
returns are growing by 15% and if Energy is reducing by 5% it is better to invest money in tech.

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Spreadsheet for last 50 trading days data

(data taken from yahoo finance and made on excel sheet.)

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1. Mean (Average)

Definition: In the stock market, the mean is often used to find the average stock price or return
over a period of time.

Formula:
Example: Suppose the closing prices of a stock over 5 days are ₹100, ₹102, ₹98, ₹101, and
₹99:

Mean Price = (100 + 102 + 98 + 101 + 99) / 5= 500/ 5 = ₹100

This helps compare average prices of stocks from different sectors.

2. Median

Definition: The middle stock price when ordered. Useful when prices have outliers.

Example: Prices: ₹90, ₹92, ₹95, ₹150, ₹155

Median = ₹95

Even though ₹150 and ₹155 are much higher, the median gives a better sense of the central
tendency unaffected by extreme values.

3. Mode

Definition: The most frequently occurring stock price or value. Useful in identifying commonly
traded price levels.

Example: If a stock closed at ₹105 for 3 days in a week, and other prices were ₹100, ₹110:​
Prices: ₹100, ₹105, ₹105, ₹105, ₹110

Mode = ₹105

This can indicate strong price support or resistance zones.

Range

Definition: The difference between the highest and lowest stock prices in a period.​
Formula:

Example: A stock in the IT sector trades between ₹450 and ₹520 over a week:

Range = ₹520 − ₹450 = ₹70

This shows the stock's volatility—higher range = more volatility.

5. Interquartile Range (IQR)

Definition: Measures the spread of the middle 50% of prices. Useful for comparing price
stability in sectors.

​
Formula:

Example: For a banking stock's 7-day closing prices: ₹90, ₹95, ₹98, ₹100, ₹103, ₹105, ₹110​
Q1 = ₹95, Q3 = ₹105

IQR = ₹105 − ₹95 = ₹10

Lower IQR means more stable performance.

6. Standard Deviation (σ)

Definition: Indicates how much stock prices deviate from the average. A key indicator of
volatility.

Formula (Population):

Example: Tech stock prices: ₹200, ₹210, ₹190, ₹220, ₹180​

Mean = ₹200

Deviation: (0² + 10² + (-10)² + 20² + (-20)²) = 1000

 Σ = (1000*5)^0.5 = (200)^0.5 ≈ ₹14.14

A higher σ in tech than pharma suggests tech is more volatile.

7. Daily Return

Definition: The percentage change in a stock’s price from one day to the next. Essential for
comparing performance across sectors.

Formula:

Example:​
A stock in the energy sector was ₹250 yesterday and ₹260 today:

Daily Return = [(260−250)/250]×100 = 4%

Tracking this over time helps analyze which sector is performing better.

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Histograms are better to keep track of daily return as it shows how varied the returns are
each day compared to the other days. Ogive curves on the other brand will not be able to
provide you with such information

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Conclusion : HDFC Bank (Banking sector) showed more consistent performance.

-​ It had a lower standard deviation (0.98 vs. 1.57) and a smaller range (5.58 vs. 11.50),
indicating less volatility and more stability in returns compared to Infosys.
 -​ Infosys stocks are more volatile as they have a greater range of return percentages,
ranging from -2.6% to +7.4%. HDFC is more stable, as it has a smaller range, from
-1.1% to +3.1%

-​ The Standard Deviation best captured the behaviour as iIt quantifies volatility, which is
crucial for stock market analysis and Infosys had a higher standard deviation, showing it
was more volatile.

-​ Box plots would be the most informative as they clearly show median, spread (IQR),
and outliers, helping compare the consistency and variability in returns between the two
sectors. In this case the IQR was similar for both, but box plots would still visualize
outliers better in the technology sector.

Practical relevance for investors or data analysts:

-​ Investors seeking stable and predictable returns might prefer the banking sector.
-​ Those willing to accept higher risk for potentially higher returns might lean toward the
technology sector.
-​ Analysts use these measures to assess risk, compare sector performance, and
make portfolio decisions based on data-driven insights.

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Sources :
[Link]
[Link]
ChatGPT for all formula diagrams.
Tools/software used Excel and Google Sheets