As I sit here studying for my statistics midterm exam, the textbook provides me a few ideas of how to utilize this analytical information within the financial markets. In this post, I will be focusing on the daily performance of one stock, Nutrisystems Inc. (NTRI). Please keep in mind that this approach can be used in reviewing any stock.

To start the statistical analysis for NTRI stock prices, I go to Yahoo Finance and download the daily stock prices for the last few years, in this case back to the start of 2005. From here, I calculated the daily price percentage gain from the previous close to see the distribution of the daily gains. In Exhibit 1, you will see the normal distribution of daily gains with a mode of 0% (highest frequency bar). Also, an interesting aspect of this data is that the average (aka mean) is +0.3%, representing that over the 903 days you would see a positive gain, a good sign for highly active or day traders. I have also attached the raw data and statistics results shown in Exhibit 2.

Exhibit 1. 

 Exhibit 2. 

 The other interesting aspect of this data shows how efficient the market is, in this case with NutriSystems common stock. So in order to do this, I setup the data to see how many days the stock would “run” positive, or streaks. I calculated how many times, in the 903 days, the stock had a positive 1-day run, 2-day run, 3-day run, and so on until 9 days.

Exhibit 3 illustrates the data and results of this analysis. To read this chart, there were 141 times that the stock had a 3-day positive run resulting in a 53.8% change from the 262 two-day runs that NTRI experienced. 

Exhibit 3. 

In summary, the odds were in your favor if you actively traded NTRI starting in 2005 until today, retrospectively speaking. On average, there was a positive daily close average with a higher than 50% opportunity in predicting a multiple day run (seeing a 2-day run and betting on a 3-day run, seeing a 3-day run and betting on a 4-day run, etc).

As I previously mentioned, I received this analysis idea from my textbook “The Manager’s Guide to Statistics by Erol A. Pekoz”. If you would like me to provide you the same analysis on a stock that you follow, please leave a comment and I will post the results.

Hopefully you enjoyed this short post on stock performance statistics, if so please consider subscribing to help me reach my goals. 

Author Disclosure: I am neither long nor short NTRI at the time of this posting

To remind me of all the goals I set for myself and this blog, I have created a new page titled “Blog Goals” in the navigation bar that collects and documents my goals. This page will serve as the constant reminder of moving towards completing this items, along with stretching me to incorporate additional milestones. I have currently segmented  these goals in two areas: Financial and Blog Related.

So too even out the number of goals, I would like to challenge myself and this blog to increase my Alexa ranking. As you can see in the left sidebar, I have added the Alexa widget of my current ranking (~1,436,617). Looking at other comparable websites and financial blogs, I think I should be able to break the 1,000,000 Alexa rank by this time next year. If you feel that might too much of a stretch, please feel free to comment.

If you would like to help me reach my goal or see my other Alexa statistics, feel free to click on the widget. This will provide you the latest info on FinancePuzzle.com

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Just recently, I was reviewing my auto insurance bill and realized I was being charged a $5 monthly fee for electing to pay my balance over a monthly basis vs. full payment every year. Even though I have setup most of all my monthly bills on automatic payment with the electronic bill payer provided by my bank, I am still charged this fee, costing my $55 per year.

Trying to understand my options, I decided to call the customer service line of the insurance company. Never missing a payment over 2 years, I voiced my frustrations with this additional fee. The customer service rep provided my an excellent option of maintaining the same monthly payment amount while removing the $5.00 fee with the electronic funds transfer program. This is simply the same thing as my automatic bill pay, the only difference is that the insurance company exercises the funds transfer using a voided check to setup the program. Under this program, I have also moved away from an 11-month payment plan to a 12-month plan for the same premium owed picking the same day every month that the payment should be initiated by the insurance company.

Example:

Before:Owing a insurance premium of $1,000 for the year, I was making 11 monthly payments of $95.91 usually due towards the beginning of the month. This amount represents 1,000 divided by 11 equaling $90.91 plus the monthly $5.00 fee.

After: Same insurance premium of $1,000/year, I will make 12 monthly payments of $83.33 initiated by the insurance company on the 9th day of every month.

So you can see how by contacting the company and understanding my payment options, I was able to save $55.00 at a minimum, not counting the interest earned by stretching out my payments over an additional month. Each month, I will deposit this savings into my net worth to help me reach my goals.

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