Advanced Time Series Analysis Essay Example

Advаnсеd Тimе Sеriеs Аnаlysis

Part I: Summary

The most recent research study indicated that there is a strong positive correlation between international soccer games and local stock earnings. This is according to the findings of Edmans and Norli (2007). The results of their findings encouraged us to adopt a novel approach to utilize this effect on the global level that has three different characteristics. In this study, econometric specification approach was adopted to ensure that an appropriate regression model is developed to help in examining the basic data. The empirical result of the analysis show that the average returns on the US market over the World cup’s effect period is -2.58% as compared to +1.21% for all day average returns for the same duration of time.

Part II: Critical evaluation

The research question on this article is very important because it allows us to learn something that we have not known. The solution to the research question could help us achieve the research objectives which is the main purpose of carrying out this study. It is also important because it is asking about something that other people care about in the community and the researcher develops it from the findings of other research or from prominent social issue such as sports. The research design of this article is also very sensible (Gujarati, 2003). It reflects a set of techniques and procedures that the author used when collecting and analyzing data. The research design is also able to define the study type and its sub type. In this case the study type is correlational while sub type is hypothesis and finally the research design developed is can also find answers to the research questions thereby leading to the achievement of the research objectives of this research study.

The researcher also conducted adequate basic data analysis by regretting the sampled data to determine the relationship between different variables. The same basic data also undergone through t–test to test the significance of the test statistics where the researcher found out that t-values range from -3.32 to -4.82. Based on the findings of the research analysis, it is possible to believe that the basic data analysis was done adequately because the result found could answer research questions. It is appropriate to use econometric specification when analyzing basic data in this article (Gujarati, 2003). Econometric specification is appropriate in developing regression model which is essential when analyzing basic data. With the help of economic specification, the researcher can select appropriate functional form that works with the regression model and also helps in the choice of the variable to be applied in the research. According to this article econometric methodology was used adequately because it was used when developing regression model.

The error term was also added to ensure that the correct result in generated during the analysis. Sensitivity analysis was also conducted adequately because the researcher determines how different values of an independent variable affect a given dependent variable based on a set of assumptions. Finally the conclusion of the author of this article also makes economic sense and economical matters by highlighting the effect of international sporting event on stock prices.

Part III Replication Exercise

Data is collected from different sources. Time series data composed of periodic data that are collected within a given period of time. These data are related to a given frequency. They are collected within a given time interval such as quarterly, semi-annually or annually. The basic data analyses which can be used to examine time series data include frequency distribution which allows the researcher to have a general picture of the data. Descriptive statistics can also be used to analyze basic data. It allows the researcher to determine three measures of central tendency and distribution of data. From the basic data, it is also possible to measure the correlation between different variables through the use of a scatter graph. The data collected are entered into the computer system.

The use of Eview is very important in building the model which is computed automatically by the system. Because of this it will be possible to test if the model is econometrically valid. The first step to take when analyzing basic data is to open the software by choosing start and selecting all programs. It is then important to develop workfile to hold the data.Once the workfile has been created, it is vital to verify the data in the workfile before saving the data file.

Part IV Further Analysis

Further analysis can also be conducted using regression facility. The most important action that must be done is to enter the data in the columns. Click on the tool and then on the data analysis to examine the data. It is necessary to select regression which will create a dialog box which ensure that there is possibility of marking the designated area and also put a check mark within the level box that appear on the dialog box. Failure to designate an area, it will be possible for the excel to have a default in order to create a new worksheet to receive the output. The main purpose of this analysis is to compare the relationship between sporting activities and global economic performance.

It is determined that there is a positive correlation between sporting activities and global economic performance. This is because the result shows a positive coefficient of variation of +80.2761. It is also found to be statistically significant at 95% degree of freedom. This shows that the effect of sporting activities affects economic stability positively. In summary an increase in sporting events increases economic performance of the globe.

Work Cited

Gujarati, D.N. (2003). Basic Econometrics, International Edition — 4th ed.. McGraw-Hill Higher Education. pp. 3-13.