TITLE
ANALYZE THE SHARE PRICE PERFORMANCE OF META USING
QUANTITATIVE METHODS
1
Table of Content
1. Introduction.........................................................................................................................3
2. Stock Selection and Rationale.........................................................................................3
3. Data Collection and Compilation.....................................................................................4
4. Descriptive Statistics and Trend Analysis.......................................................................4
4.1. Mean:.........................................................................................................................4
4.2. Median:......................................................................................................................5
4.3. Standard Deviation:....................................................................................................5
5. Correlation and Regression Analysis..............................................................................6
I. Correlation Matrix:........................................................................................................6
II. Model Summary:..........................................................................................................6
III. ANOVA (Analysis of Variance):................................................................................7
IV. Coefficients:................................................................................................................7
6. Hypothesis Testing............................................................................................................9
7. Discussion and Interpretation...........................................................................................9
8. Recommendations and Future Outlook........................................................................10
9. Conclusion........................................................................................................................11
10. References:....................................................................................................................12
11. Appendix..........................................................................................................................13
List of Tables
Table 1: Table showing correlation between Nasdaq and Meta........................8
Table 2: Table showing Model Summary...................................................................8
Table 3: Table showing ANOVA.....................................................................................8
Table 4: Table showing coefficients of Dependent(Meta) variables and independent (Nasdaq)
variables...................................................................................................................................8
List of Figures
Figure 1: Statistical Analysis of Mean, Median and SD.............................................................5
Figure 2: Diagram for Closing share of Meta.............................................................................6
Figure 3: Correlation between Close value of Meta and NASDAQ............................................9
2
1. Introduction
I as an investor was keen on understanding the performance of Meta Platforms, Inc.,
which is also known as Facebook, Inc. I recognized the importance of analyzing its
share price performance. Meta Platforms offers globally acclaimed social media
platforms like Facebook, Instagram, WhatsApp, and Messenger. These platforms
have reshaped how billions of users interact, making Meta an important player in the
digital landscape.
Employing quantitative methods is essential to dissecting Meta's stock performance. I
aim to cover trends and patterns influencing Meta's share prices (Duarte et al., 2010).
This is through statistical analysis of historical stock data, including monthly closing
prices and trading volumes. I seek to identify key drivers impacting Meta's stock
movement by diving into correlations with broader market indices.
2. Stock Selection and Rationale
Choosing Meta Platforms, Inc. (formerly Facebook, Inc.) for analysis is a strategic
decision which was driven by several factors. Firstly, Meta Platforms is a dominant
force in the technology sector, boasting a portfolio of widely used social media
platforms such as Facebook, Instagram, WhatsApp, and Messenger. These platforms
have amassed billions of active users worldwide. This makes Meta a significant
player in the digital landscape.
Furthermore, Meta's stock performance is closely tied to its innovative capabilities
and market trends (Bareebe & Rukuuka, 2021) . As a technology giant, Meta
constantly innovates to maintain its competitive edge and adapt to evolving user
preferences and industry dynamics. Analyzing Meta's stock performance provides
insights into broader market trends. Especially in the technology sector, which can
inform investment decisions across various industries.
Moreover, Meta's stock is actively traded on major stock exchanges. This ensures
market visibility. This liquidity allows for smoother transactions and reduces the
impact of price fluctuations. This makes Meta an attractive choice for investors
seeking stability and growth potential.
3
3. Data Collection and Compilation
Data pertaining to Meta's monthly closing share prices can be sourced from reputable
financial databases or directly from stock exchanges where Meta is listed, such as the
New York Stock Exchange (NYSE). Similarly, NASDAQ's monthly closing share
prices can be obtained from NASDAQ's official website or financial data providers
(Duarte et al., 2010).
Additionally, volume traded for Meta and NASDAQ can be collected to gauge market
activity and liquidity. This data can be retrieved from stock exchange reports or
financial news platforms that provide comprehensive market statistics.
We can perform correlation and regression analysis to get insights into the
relationship between Meta's share prices and broader market trends. This is by
incorporating data from both Meta Platforms, Inc. and NASDAQ. This holistic
approach enhances the robustness of our analysis and enables informed decision-
making for investors and stakeholders.
4. Descriptive Statistics and Trend Analysis
In this section, I have done descriptive statistics and trend analysis to gain insights
into the performance of Meta Platforms, Inc. and NASDAQ. I aim to understand the
central tendency and variability of the data, providing a foundation for trend
[Link] is By examining key metrics such as mean, median, and standard
deviation.
4.1. Mean:
The mean of Meta's and NASDAQ's monthly closing share prices provides a measure
of their central tendency over the analyzed period. Calculating the mean allows us to
discern the general price level of Meta's stock and NASDAQ's index and assess any
shifts in their pricing trends over time.
Mean = Sum of all data /No of data
Total no of month= 60
Sum of Closing stock price=14771.68998 for Meta and 711828.2793 for Nasdaq
Mean =246.9148329 for Meta and 11863.80465 for Nasdaq
4
4.2. Median:
The median, or middle value, of Meta's and NASDAQ's monthly closing share prices
offers an alternative measure of central tendency that is less sensitive to outliers
(Bakhsh et al., 2021). I can ascertain the typical value of Meta's stock and NASDAQ's
index, providing additional insight into their pricing dynamics.
Median = no of data/2
If the median is odd then the data will be the average of the two middle points.
The median for this is :
Median :233.695007 for Meta and 12210.3252 for Nasdaq
4.3. Standard Deviation:
The standard deviation of Meta's and NASDAQ's monthly closing share prices
quantifies the dispersion or variability of the data points around their respective
means. A higher standard deviation indicates greater variability suggests potential
fluctuations in Meta's stock and NASDAQ's index. Understanding the standard
deviation helps assess the risk associated with investing in Meta and NASDAQ,
providing valuable insights for risk management strategies.
SD of Nasdaq is 2496.04555 and meta is 78.58377112
Statistical Analysis
14000
12000
10000
8000
6000
4000
2000
0
Mean Median SD
Series1 Series2 Series3
Figure 1: Statistical Analysis of Mean, Median and SD
5
Closing Shares of Meta
600
500
400
300
200
100
0
43000 43500 44000 44500 45000 45500
SD
Figure 2: Diagram for Closing share of Meta
5. Correlation and Regression Analysis
I. Correlation Matrix:
The correlation matrix shows the correlation coefficient between Nasdaq and Meta. A
correlation coefficient of 0.7476 suggests a strong positive correlation between the
two variables. This indicates that changes in Nasdaq tend to correspond with changes
in Meta's closing price.
II. Model Summary:
This section provides an overview of the regression model's performance.
R represents the correlation coefficient between the observed and predicted values of
Meta's closing price. An R value of 0.748 indicates a moderately strong positive
correlation between the observed and predicted values.
R Square (R^2) indicates the proportion of variance in Meta's closing price that can be
explained by changes in Nasdaq. An R^2 value of 0.559 suggests that approximately
55.9% of the variability in Meta's closing price can be explained by changes in
Nasdaq.
Adjusted R Square adjusts the R^2 value for the number of predictors in the model,
providing a more accurate estimate of the model's goodness of fit.
6
Std. Error of the Estimate represents the standard deviation of the residuals. This
provides a measurement of the model's accuracy in predicting Meta's closing price.
III. ANOVA (Analysis of Variance):
ANOVA assesses the overall significance of the regression model.
The Regression row provides information about the variability explained by the
regression model compared to the variability within the data (Residual).
The F statistic tests the overall significance of the regression model. A high F value
(73.495) with a significant p-value (0.000) suggests that the regression model is
statistically significant.
The p-value associated with the F statistic (Sig.) indicates the probability of obtaining
the observed F value if the null hypothesis (no relationship between the variables)
were true.
IV. Coefficients:
The Coefficients table displays the regression coefficients for the predictors in the
model.
The "V2" row represents the coefficient for Nasdaq Composite Index in predicting
Meta's closing price. A coefficient of 0.024 indicates that, on average, a one-unit
increase in Nasdaq is associated with a 0.024-unit increase in Meta's closing price.
The "t" value assesses the significance of the regression coefficients. A high t value
(8.573) with a significant p-value (0.000) indicates that the coefficient for Nasdaq is
statistically significant.
Overall, the regression analysis suggests that Nasdaq significantly predicts Meta's
closing price, with approximately 55.9% of the variability in Meta's closing price
being explained by changes in Nasdaq.
7
Nasdaq meta
Nasdaq 1
0.74760789
meta 1
3
Table 1: Table showing correlation between Nasdaq and Meta
Model Summary
Adjusted
R Std. Error of
Model R R Square Square the Estimate
a
1 .748 0.559 0.551 52.638651970
Table 2: Table showing Model Summary
ANOVAa
Sum of
Model Squares df Mean Square F Sig.
1 Regressio 203641.13 1 203641.130 73.495 .000b
n 0
Residual 160708.00 58 2770.828
6
Total 364349.13 59
6
a. Dependent Variable: Meta Closing Price
b. Predictors: (Constant), Nasdaq Composite Index(V2)
Table 3: Table showing ANOVA
Coefficientsa
Standardized
Model Coefficients t Sig.
Beta
1 (Meta) - 33.274 -0.993 0.325
33.046
V2[Nasdaq] 0.024 0.003 0.748 8.573 0.000
Table 4: Table showing coefficients of Dependent(Meta) variables and independent (Nasdaq)
variables
8
Regression analysis presents the relationship between a dependent variable (Meta's
closing prices) and an independent variable (NASDAQ's closing prices). It is a
statistical process that determines this relationship. The linear model assumptions for
regression analysis ensure the validity of the derived insights.
Correlation between close value of Meta and
nasdaq
12
10
0
0 2 4 6 8 10 12
Close Close
Figure 1: Correlation between Close value of Meta and NASDAQ
6. Hypothesis Testing
I will perform hypothesis testing to determine whether the correlation coefficient
estimated in part 5 is statistically significant.
H0 states that there is no significant correlation between Meta's and NASDAQ's
closing prices.
H1 asserts that there exists a statistically significant correlation between Meta's and
NASDAQ's closing prices.
Since, the value obtained is greater than 0, so we can say that there is a relation
between Meta and NASDAQ closing price. As the Nasdaq increases the Meta closing
values also increases and Vice versa. This means that Meta's stock performance
demonstrates a positive correlation with the NASDAQ index.
9
7. Discussion and Interpretation
The analysis of descriptive statistics, trend analysis, correlation, regression, and
hypothesis testing results have a valuable insights into the relationship between Meta's
stock performance and the NASDAQ index (Celli & Polonio, 2016).
Descriptive statistics, including mean, median, and standard deviation, provide a
snapshot of Meta's stock performance over the analyzed period. The mean closing
price indicates the average value, while the median offers a measure of central
tendency. The standard deviation quantifies the variability in stock prices.
Hypothesis testing corroborates these findings, confirming the statistical significance
of the correlation coefficient. Additionally, the analysis supports the alternative
hypothesis, indicating that the average monthly stock price change for Meta is above
zero.
8. Recommendations and Future Outlook
Based on the analysis conducted, several recommendations and insights emerge to
guide investment decisions and anticipate future trends for Meta Platforms, Inc.
Investors should consider diversifying their portfolios beyond individual stocks to
mitigate risks associated with market volatility (Petturiti & Vantaggi, 2024) . While
Meta's stock performance demonstrates a positive correlation with the NASDAQ
index, diversification across various asset classes can enhance portfolio resilience.
Continuous monitoring of market trends and macroeconomic indicators is important
for informed decision-making. Given the strong correlation between Meta's stock
prices and the NASDAQ index stays ahead of developments in the broader market.
This can provide valuable insights into potential shifts in Meta's performance.
Meta's future outlook hinges on its ability to adapt to evolving technological trends.
Continued investment in research and development can bolster Meta's competitive
position and drive long-term growth (Bareebe & Rukuuka, 2021).
In conclusion, proactive portfolio management, technological innovation, regulatory
compliance, and a focus on long-term value creation are essential for maximizing
returns in Meta's environment (Lucia et al., 2023) . Investors can position themselves
to capitalize on Meta's potential for future success by implementing these
recommendations.
10
11
9. Conclusion
We can conclude that Meta's stock performance demonstrates a positive correlation
with the NASDAQ index. This means that the fluctuation in NASDAQ composite
index has direct impact on the Meta closing share [Link]'s future outlook
hinges on its ability to adapt to evolving technological trends.
12
10. References:
Bakhsh, A., Salam Buller, A., Rajput, U., Mastoi, S., Bux kalhoro, N., Bakhsh mugheri, A., salam buller,
A., Umair Ahmed, P., Bano Mastoi, R., Mastoi, N., Ahmed, U., & Statistical, A. (2021). A
STATISTICAL ANALYSIS FOR MATHEMATICS & STATISTICS IN ENGINEERING TECHNOLOGIES
(RANDOM SAMPLING). A STATISTICAL ANALYSIS FOR MATHEMATICS & STATISTICS IN
ENGINEERING TECHNOLOGIES (RANDOM SAMPLING). International Journal of Management
(IJM), 12(3), 416–421. HYPERLINK "[Link] \h
[Link]
Bareebe, R., & Rukuuka, B. (2021). Financial Performance Analysis of Meta
Platforms, Inc. [Link]
Celli, F., & Polonio, L. (2016). Facebook and the Real World: Correlations
between Online and Offline Conversations. In Proceedings of the
Second Italian Conference on Computational Linguistics CLiC-it 2015
(pp. 82–87). Accademia University Press.
[Link]
Duarte, F. B., Tenreiro Machado, J. A., & Monteiro Duarte, G. (2010).
Dynamics of the Dow Jones and the NASDAQ stock indexes. Nonlinear
Dynamics, 61(4), 691–705. [Link]
Lucia, B., Vetter, M. A., & Adubofour, I. K. (2023). Behold the metaverse:
Facebook’s Meta imaginary and the circulation of elite discourse. New
Media and Society. [Link]
Petturiti, D., & Vantaggi, B. (2024). The impact of ambiguity on dynamic
portfolio selection in the epsilon-contaminated binomial market model.
European Journal of Operational Research, 314(3), 1029–1039.
[Link]
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11. Appendix
Date Nasdaq Meta
31/01/201 7281.74023
166.690002
9 4
28/02/201 7532.52978
161.449997
9 5
29/03/201 7729.31982
166.690002
9 4
30/04/201 8095.39013
193.399994
9 7
31/05/201 7453.14990
177.470001
9 2
28/06/201 8006.24023
193
9 4
31/07/201 8175.41992
194.229996
9 2
30/08/201 7962.87988
185.669998
9 3
30/09/201 7999.33984
178.080002
9 4
31/10/201 8292.36035
191.649994
9 2
29/11/201 8665.46972
201.639999
9 7
31/12/201 8972.59960
205.25
9 9
31/01/202
9150.94043 201.910004
0
28/02/202 8567.37011
192.470001
0 7
31/03/202 7700.10009
166.800003
0 8
30/04/202 8889.54980
204.710007
0 5
29/05/202 9489.87011
225.089996
0 7
30/06/202 10058.7695
227.070007
0 3
31/07/202 10745.2695
253.669998
0 3
31/08/202 11775.4599
293.200012
0 6
30/09/202 11167.5097
261.899994
0 7
30/10/202 10911.5898
263.109985
0 4
30/11/202 12198.7402 276.970001
14
0 3
31/12/202 12888.2802
273.160004
0 7
29/01/202 13070.6904
258.329987
1 3
26/02/202 13192.3496
257.619995
1 1
31/03/202 13246.8701
294.529999
1 2
30/04/202 13962.6796
325.079987
1 9
28/05/202 13748.7402
328.730011
1 3
30/06/202
14503.9502 347.709991
1
30/07/202 14672.6796
356.299988
1 9
31/08/202 15259.2402
379.380005
1 3
30/09/202 14448.5800
339.390015
1 8
29/10/202 15498.3896
323.570007
1 5
30/11/202 15537.6904
324.459991
1 3
30/12/202 15741.5595
324.459991
1 7
28/01/202 13770.5703
301.709991
2 1
28/02/202 13751.4003
211.029999
2 9
31/03/202 14220.5195
222.360001
2 3
29/04/202 12334.6396
200.470001
2 5
31/05/202 12081.3896
193.639999
2 5
30/06/202 11028.7402
161.25
2 3
29/07/202 12390.6904
159.100006
2 3
31/08/202
11816.2002 162.929993
2
30/09/202 10575.6201
135.679993
2 2
31/10/202 10988.1503
93.160004
2 9
30/11/202
11468 118.099998
2
30/12/202 10466.4804
120.339996
2 7
15
31/01/202 11584.5498
148.970001
3 1
28/02/202 11455.5400
174.940002
3 4
31/03/202 12221.9101
211.940002
3 6
28/04/202 12226.5800
240.320007
3 8
31/05/202 12935.2900
264.720001
3 4
30/06/202 13787.9199
286.980011
3 2
31/07/202 14346.0195
318.600006
3 3
31/08/202 14034.9697
295.890015
3 3
29/09/202 13219.3203
300.209991
3 1
31/10/202 12851.2402
301.269989
3 3
30/11/202 14226.2197
327.149994
3 3
29/12/202 15011.3496
353.959991
3 1
31/01/202 15164.0097
390.140015
4 7
29/02/202 16091.9199
490.130005
4 2
Nasdaq Meta
Mean 11863.80465 Mean 246.1948329
Standard Error 322.2380949 Standard Error 10.14512123
Median 12210.3252 Median 233.695007
Standard Deviation 2496.04555 Standard Deviation 78.58377112
Sum 711828.2793 Sum 14771.68998
Count 60 Count 60
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