Description By Table

Description by       Table

Table 4:

Table 4 shows the monthly growth in value, the table shows the average value growth in France, Germany, Switzerland, UK, Japan, US, Europe and Global growth. According to this table the average given have a standard deviation and t statistics, annual averages and their standard deviation.

The average value give us a central measure of the entire data, example given that the monthly growth in value in France is 0.53 means that this is the estimated value growth in France, using the mean we can be in a position to determine which country or region has the highest value growth, France has the highest value growth and Japan is the second highest, US has the lowest value growth as indicated by our monthly value growth. For this reason with regard to monthly growth it would be advisable for any investor to invest in those countries or regions that have a high value growth, the following charts summarise the information portrayed by the average values:

From the charts it is clear that the best region to invest in is France, followed by Japan due to their high average value growth value as shown, therefore being an investor the best investment would be to invest in France or Japan as shown by the mean return.

When we observe the t statistic level whose purpose is to test the significance of the mean value, if we are to test the significance of the mean values given the level of test as 0.1 from the t table then the following will be the results:

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Description by  Table

MONTH AVERAGE

T STATISTICS T CRITICAL SIGNIFICANCE

FRANCE

0.53

1.62

1.281552

YES

GERMANY

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0.13

0.44

1.281552

NO

SWITZERLAND

0.31

1.26

1.281552

NO

UK

0.23

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0.81

1.281552

NO

JAPAN

0.5

1.57

1.281552

YES

US

0.11

0.67

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1.281552

NO

EUROPE

0.23

1.24

1.281552

NO

GLOBAL

0.29

1.98

1.281552

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YES

Given our statistical level of test we conclude that the global mean, Japan mean and France mean is statistically significant, for this reason we are still left with the two options on whether to invest in Japan or in France.

We consider the standard deviation to construct the confidence interval and from the calculations using the standard deviation for the monthly averages then the following were the lower and upper bounds of the confidence interval at 95% probability level:

Lower boundaries

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Description by  Table

Upper boundaries

MONTH AVERAGE

SD

FRANCE

0.53

3.86

-7.0354456

8.095446

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GERMANY

0.13

3.14

-6.0242744

6.284274

SWITZERLAND

0.31

2.9

-5.373884

5.993884

UK

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0.23

3.32

-6.2770672

6.737067

JAPAN

0.5

3.76

-6.8694496

7.86945

US

0.11

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1.99

-3.7903204

4.01032

EUROPE

0.23

2.18

-4.0427128

4.502713

GLOBAL

0.29

1.7

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-3.041932

3.621932

From the analysis of the confidence interval we can conclude that we are 95% confident that the average monthly value growth in France lies between -7.03 and 8.09, we can also state that we are 95% confident that the average value growth in Japan lies between -6.86 and 7.86. using our confidence interval it is clear that the higher the average value growth level then the higher is the risk, for this reason using our confidence interval it would be better to invest in Japan than invest in France due to the high deviations in value growth associated with the France mean and data.

Table 5:

Table five portrays the correlation of data from different regions, positive correlations states that as one variable of data increases then the other variable will increase, to have strong correlation then the value of correlation must be very close to one, this data on correlation can be used to determine the state of value growth of another country given the value growth of a certain country, negative value of correlation mean that as one country value grows then the value of

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the other country is decreasing. There is a higher correlation between the value growths in the UK and in France and the value is 0.34, Japan is also positively correlated with the UK at 0.07 correlation value, for this reason it would be advisable to invest in France than in Japan.

References:

William F sharpen (1993) International value and growth stock return, financial analysts journal

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