How to analyze market statistics?

<p id="isPasted">Here are six models of analysis that professionals may use to analyze market research:</p><p><strong>Multiple regression</strong></p><p>Multiple regression is a statistical model that tries to find the equation that best explains how the changes of an independent variable affect dependent variables. For example, to determine what a successful new product design would be for your notepad company, you could analyze what colors, sizes and paper types had higher sales revenue in the past.</p><p>Related: <a href="https://www.indeed.com/career-advice/career-development/multiple-regression-analysis-definition" target="_blank" rel="noopener noreferrer">Multiple Regression Analysis: Definition and How To Calculate</a></p><p><strong>Discriminant analysis</strong></p><p>Discriminant analysis organizes data into two or more categories. You can use this method to find out why some factors result in specific outcomes. This can help you determine best practices for any aspect of your business, like your products, your customers or even your distribution styles for each product. For example, you can use data about customers' purchasing habits to determine which of your products appeal to which demographics. This can help you segment your products for more direct marketing.</p><p><strong>Factor analysis</strong></p><p>Factor analysis determines which factors in any given situation have the strongest correlation. You can use this to identify the factors that determine your revenue. If the notepad company is trying to understand what makes its notepads appealing to specific demographics, it can use factor analysis to determine two or three factors about its notepads that make one set appeal to a particular customer group vs. another. The company can then use these factors to guide new product designs.</p><p><strong>Cluster analysis</strong></p><p>Cluster analysis is establishing clusters of things that have similarities. The idea is to create as many clusters of similarities as possible. There may be some clusters that overlap, which can help you identify multiple ways to market to a specific audience. Essentially, cluster analysis is useful for recognizing patterns, and the more patterns you can recognize, the more information you can use in your marketing.</p><p>You can use cluster analysis to determine market segmentation. For example, if you work for the notepad company, all your customers write on paper. However, some customers work in business and some customers are teachers. Recognizing the similarities and differences between these groups can help you market to them more effectively.</p><p><strong>Conjoint analysis</strong></p><p>Conjoint analysis is identifying the attributes of a product, then conducting research to determine which attributes influence the customer's decision to buy and at what price point. Conjoint analysis tries to determine the utility of each attribute, meaning what the customer uses it for, and the relative importance of each attribute, meaning how important it is to the customer's decision to buy that product.</p><p><strong>Multidimensional scaling</strong></p><p>Multidimensional scaling is a type of analysis that compares a company or product to its competitors by organizing them on a map. The similarities of the product's attributes determine where each competitor is on the map.</p><p>For instance, as a notepad seller, you may place other notepad brands with the same target markets and price points very close to your product in the center of the map. A little further away, you may place notepads that are at different price points or have different target markets. On the part of the map the furthest away from your product, you may place other stationary brands that sell items similar to your notepads but aren't direct competitors. This can help you determine where you are in your market and what your strengths are compared to your competitors.</p>

<p id="isPasted">To analyze market statistics for trading, you can use technical analysis, fundamental analysis, and sentiment analysis. Technical analysis focuses on chart patterns and historical price action, fundamental analysis assesses a security's intrinsic value, and sentiment analysis measures overall market emotion. Many traders use a combination of these approaches to make informed decisions.&nbsp;</p><p><strong>Technical analysis</strong></p><p>Technical analysis predicts future price movements by studying statistical trends gathered from trading activity, such as historical price and volume data. This method is heavily chart-based and is favored by short-term traders.&nbsp;</p><p>Key tools for technical analysis:</p><ul><li>Charts: Price charts, such as candlestick charts, are used to visualize trading activity over a specified period. Candlestick charts, for example, show the open, close, high, and low price for a given interval, with the color indicating whether the price closed higher or lower than it opened.</li><li>Trends: Identify the market's general direction, whether it is an uptrend (bullish), downtrend (bearish), or a sideways trend (ranging). An uptrend features higher highs and higher lows, while a downtrend shows lower highs and lower lows.</li><li>Support and Resistance: These are price levels where the stock historically finds a temporary floor (support) or ceiling (resistance). These levels are seen as psychological barriers where traders are likely to buy or sell.</li><li>Indicators and Oscillators: These are mathematical calculations applied to price and volume data.</li><li>Moving Average (MA): Smooths out price data to help identify the direction of a trend and potential entry/exit points.</li><li>Relative Strength Index (RSI): A momentum oscillator that measures the speed and change of price movements. A reading above 70 indicates an "overbought" condition, while a reading below 30 suggests an "oversold" condition.</li><li>Moving Average Convergence Divergence (MACD): Shows the relationship between two moving averages of an asset's price. Traders look for crossovers to signal potential trend reversals.</li><li>On-Balance-Volume (OBV): Measures market volume. A rising OBV indicates growing investment interest, while a declining OBV points to bearish sentiment. </li></ul><p id="isPasted"><strong>Fundamental analysis</strong></p><p>This method measures a security's intrinsic value by examining economic and financial factors. It is more suited for long-term investing, as it focuses on a company's overall health.&nbsp;</p><p>Key statistics for fundamental analysis:</p><ul><li>Earnings per share (EPS): A company's profit allocated to each outstanding share of common stock.</li><li>Price-to-Earnings (P/E) Ratio: Compares a company's current stock price to its EPS, indicating what investors are willing to pay per dollar of earnings.</li><li>Financial Reports: Analyzing a company's balance sheet, income statement, and cash flow statement provides insight into its financial health.</li><li>Industry and Economic Trends: Overall economic indicators, industry news, and competitive analysis can inform investment decisions. </li></ul><p><strong>Sentiment analysis</strong></p><p>Sentiment analysis looks at the collective emotions of the market to predict price movements, based on the idea that prices often reflect fear and excitement.&nbsp;</p><p>Key sentiment indicators:</p><ul><li>Volume analysis: Significant spikes in trading volume can indicate a shift in market interest and investor sentiment.</li><li>Volatility Index (VIX): Measures the market's expectation of future volatility, acting as an indicator of investor fear or confidence.</li><li>Surveys of investor sentiment: Surveys that show extreme bullishness or bearishness can be used for contrarian investing, as a widely shared sentiment may precede a trend reversal. </li></ul>