Individual case study part a cryptocurrency and company share

Assessment #2 - Individual Case Study (40%) Course name: ECON1193 - Business Statistics Lecturer: Chu Thanh Tuan Name: ID number: Word count: 2672 Individual Case Study Part A: Cryptocurrency and Company Share Before being renamed as Verge currency in 2016, it was created in 2014 and known as DogeDarkCoin With some anonymity features, Verge has provided privacy to their users Beside that, it is at the rank of 102 in the cryptocurrency by market cap at $783.9M USD (CoinFI 2021) As for the Tilray company, it is a world leader in cannabis research, cultivation preparing and distribution with a desire to run and legalize the industry,Tilray has built a world-wide reliable and sustainable cannabis and hemp corporation As a result, doctors, pharmacies, hospitals, governments, and researchers have used the products of this GMP certified medical cannabis maker (Tilray Inc 2021) While many people have aversion to cannabis, it offers many benefits and human help, most commonly used to treat many medical conditions and symptoms It is effective in treating nausea, anorexia or insomnia (Capler 2009) The cryptocurrency article is mostly about analysing the XVG status around August 2020 Despite being in the top 100 of electronic currencies, Verge currency is still known by many people when its price increase during the year is over 650% in just three months After that, the author briefly talks about the exchange price status of the currency as well as the attraction of potential investors Finally, there is a price analysis about Verge, which is constantly changing due to factors such as Fib level and SMA Through the information and expressions that are contained in the article, the reader understands the importance of the analysis as well as the constantly changing state of cryptocurrencies (Shah 2020) The article about company share has four main parts.Firstly, the author talks about existing problems in the Aphria merger project when the directors board changes the voting rules Besides, the quarterly reports of the Aphria and Tilray are one of the factors affecting the project Secondly, the news continues discussing this merger issue as well as possible present obstacles In the final part are the future challenges The first one is Covid-19, which has affected both of these companies, notably Aphria Besides, because there was a cannabis legalization in the US,there were some high expectations of success from investors At the end of the article is some information about the cannabis market Tilray's merger with Aphria as well as 16 states that legalized cannabis made the company even stronger (Speights 2021) Figure 1: The closing price of the cryptocurrency, Verge ( USD) chart When looking at the Verge’s graph, the most viable thing can be seen is the weekly closing price in 2020 has a significant increase The price on 1/1/2020 is $ 0.0035, after one year,it is $ 0.0075 Specifically, within the first month, the price had a slight increase from 0.0035 to 0.0051 and then steadily decreased in the following month when the number fell down to 0.0020 on 11/3/2020 From that point, there was a rapid increase, raising to $ 0.0091, making the top 100 of (the biggest Figure 1: The closing price of theVerge cryptocurrency, Verge USD) chart cryptocurrencies on 10/6/2020 Thereafter there are relatively large increases and decreases On 4/11//2020, for example, the closing price fell to $ 0.0039 and rose sharply over the next three weeks, on 18/11/2020 with a Verge price of $ 0.0085 Finally, during the late 2020 period, there is a slight change as the price drops to $ 0.0075 by 30/12/2020 Figure 2: The closing price of the company share, Tilray (USD) chart With Tilray's share graph, Tilray's 2020 overview is a huge loss as its closing price falls from $ 15.33 to $ 8.63 Specifically, within the first week of 2020, the company's closing price increased rapidly from $ 15.33 to $ 21.21 However, it dropped dramatically over the next two months (January to March 11) from $ 21.21 to $ 2.90 Since that time, the company has not seen a significant rise except for the period from March 11 to May 20, when there was a slight increase from $ 2.9 to $ 10.81 Not only that, from the beginning of June until the end of 2020, the closing price could not exceed $ 10.00, in other words, the price fluctuates continuously from $ 4.83 to $ 8.70 Even on the last day of the year (30/12/ 2020), Tilray's value was only $ 8.63 Min Tilray (TLRY) -63.01 >,=,< Lower < bound -29.87 Max 71.17 >,=,< Upper Results > bound 30.24 +2 lower outliers, +4 upper Verge -40.27 < -27.12 86.50 > 32.24 (XVG) outliers +2 lower outliers, +2 upper outliers, Figure 3: Table of outliers in the Tilray’s and Verge’s weekly returns Looking at this figure, it can easily be seen that the weekly return of Tilray company has outliers, including lower and upper Meanwhile, the Verge weekly returns has only outliers ( lower and upper) Figure 4: : Histogram of Tilray’s and Verge’s weekly returns in 2020 From the charts, it can easily infer that both the cryptocurrency and the company share has the weekly return shape skewed to the right of the chart Central tendency Mean Median Mode Tilray (TLRY) 0.92 0.05 N/A >,=,< < > Verge (XVG) 3.04 -0.97 N/A Figure 5: Measurements of Central Tendency of Tilray’s and Verge’s weekly returns Theoretically, the mean is determined by summing up all of the attributes and dividing by how many times it appears in a data set As for the median, it is the value placed in the middle of the data set while being sorted in a certain order Besides, it also focuses on the location of data rather than value Finally there is mode, a value that occurs most times in a data set Sometimes it will appear, but sometimes it is not (Manikandan 2011) That is why when comparing central tendency, the most common measure is the mean In this case, we see that the mean of Tilray is 0.92 which is lower than that of Verge of 3.04 This also means that weekly returns for XVG are higher than for TLRY, in other words, TLRY in 2020 has lost a lot of money Range Interquartile range Sample variance Standard deviation Coefficient TLRY >,=,< XVG 134.15 15.03 383.83 19.59 > > > > 126.77 14.84 380.82 19.51 > 6.41 of 20.92 variation Figure 6: Measurements of Variation of weekly returns of TLRY and XVG First of all, variation describes the distance between the data as well as the central of the distribution It is a useful tool for data summary and statistics (Bhandari 2020) It is usually measured in five different forms It includes range, interquartile range, standard deviation, sample variance, and coefficient of variation Among them, the standard deviation is the most suitable measure for the variation of the data The reason is that it helps people know, on average, how far away each point is from the mean Moreover, there will be more variation in the data set when the standard deviation is larger As can be seen in figure 6, the standard deviation of Tilray is 19.59 is larger than the Verge’s one (19.51) This also means that the data set of Tilray has more variability than Verge’s Figure 7: Box and Whisker plot of weekly returns of Verge When looking at figure 7, it is easy to say that the right side of the box is bigger than the left side The same thing happens with the whisker, where the right side is significantly longer than the left side From the above, it can be concluded that the Shape of Verge's weekly returns is left-skewed as well as a wider spread to the right Figure 8: Box and Whisker plot of weekly returns of Tilray Whereas figure only has a slight difference between left and right Specifically, when comparing the left and right sides of the box, it is clear that the left side is shorter than the right Likewise with a whisker From there, a conclusion can be drawn, which is that the shape of Tilray's weekly returns is left-skewed and the spread is shorter than Verge's Assume the loss in returns of Verge is A The probability of A in 2020 will be: First Quarter: P(A/Q1)= =0.67 12 =0.30 13 Second Quarter: P(A/Q2) = 14 Third Quarter:P(A/Q3)= Fourth Quarter:P(A/Q4)= = 0.57 = 0.46 13 With the loss in returns of Tilray, assume it is B The probability of B in 2020 will be: First Quarter: P(B/Q1)= =0.67 12 Second Quarter: P(B/Q2)= Third Quarter:P(B/Q3)= Fourth Quarter:P(B/Q4)= =0.46 13 = 0.57 14 = 0.30 13 After calculating the loss probability of weekly returns of both cryptocurrency and company share, a conclusion can be drawn that the probability depends on the quarter the investment is made For instance, in the second quarter and fourth quarter, the chance of making a loss for Verge and Tilray is quite small, less than 50% ( XVG: 30%,46% and TLRY:46%,30%) While the other two quarters, it is much higher In the first one, both the cryptocurrency and the firm may face the loss with the probability of 67% and 57% in the third one In order to be able to calculate the confidence interval of the weekly 2020 return of the cryptocurrency Verge and the Tilray company share, a confidence level of 95% should be used This leads to, the significance level, α, will be 5% Significance level first is a measure of the strength of the sample Verge Tilray Significant level(α) Confidence level(1-α) Population standard deviation(σ) 5% 95% unknown 5% 95% unknown Sample size (n) Sample mean (x) Sample standard deviation(S) Degree of freedom(d.f) T-critical value (t) 52 3.04 19.51 51 -2.31, 2.31(two-tailed) 52 0.92 19.59 51 -2.31,2.31(two-tailed) 2,01(right tailed) 2,01(right tailed) Figure 9: Statistic summary table with the confidence level of 95% for XVG cryptocurrency and TLRY company share Since the sample size n = 52> 30, following a CLT statistical concept, it can be inferred that the data set of both is normal distribution In addition, because the standard deviation of the population is obscure, the standard deviation of the sample must be used Then, since α is 0.05, we know that each side will be 0.025 From there we get t value at both ends On the last step, the confidence interval range:  Lower end of the range (XVG) =X-t* t*  S √n S √n =-3.21 Lower end of the range (TLRY)=X- =-5.33 Upper end of the range (XVG)=X+t* =X+t* S √n ⇛The CI S =9.28 Upper end of the range (TLRY) √n =7.17 of XVG is (-3.21,9.28) The CI of TLRY is (-5.33,7.17) Theoretically, when looking at the formula, the sample size and confidence interval are opposite units Therefore, when sample size increases, intervals will decrease and vice versa In fact, if the investment is made over more weeks, then the interval inevitably decreases This is because adding more weeks also means increasing the sample size and based on theory the higher in sample size, the lower in the interval In order to be able to calculate which investments will face the higher price volatility risk over the long term, it is necessary 10 to calculate the width of the confidence intervals The larger the width of the side, the more it will vary, from which the possibility of variation can be deduced the width of the XVG is about 12.49 while the width of the TLRY is about 12.50 Overall, an investment in the cannabis company, Tilray, will be more risky than Verge over a longer period of time When a financial crisis occurs, the value of money falls drastically This will affect more or less Tilray, but it is certain that it will cause the stock and weekly closing prices to decline Besides, when a crisis occurs, people tend to save the money they have This has an indirect impact on the hospital's medical marijuana needs Cryptocurrency Verge is also unavoidable, when the financial crisis occurs, few people can afford to spend a large amount of money on this virtual currency system In other words, the financial crisis will affect the sample size, sample mean and sample standard deviation These factors have a negative effect on the confidence interval Let's talk about cryptocurrencies first, to be able to make a hypothesis, the first thing to is to determine if the sample is normal distribution More specifically, because of the sample size: n> 30, this sample is normal distribution Next we will hypothesize, including H0 and H1 H0 is a null hypothesis while H1 is an alternative hypothesis In this case, H0 = 3% and H1 3% Next we will need to confirm the population standard deviation so that we can have it Because the population cannot be identified, the population standard deviation cannot be used and will instead use the sample one As shown in figure 9, there is enough information to confirm a hypothesis Based on the t-table test formula, ưe can calculate a specific number is: 0.015 From here, we will compare with the t-critical value, we can see that the t value is smaller than the critical value From here, a plausible conclusion is that the null 11 hypothesis will also be confirmed that the average weekly investment of returns for 2019 is the same as 2020 Likewise with Tilray company shares, the first thing to is to determine if there is a normal distribution and it is obvious that Tilray has the same distribution as Verge Next is the identification of a hypothesis with another H0 = and H1 The population cannot be identified as well as the reason why the Tilray data need to use the sample standard deviation Based on the t-table test formula, a Ospecific number for Tilray is: -0.029 This number is smaller when comparing the two ends of the critical value of t Therefore, the null hypothesis can be confirmed as well as the average weekly investment of returns for 2019, which is 1%, is the same as 2020 Part B: Financial Brief Overall, Verge is a 102nd top cryptocurrency It also has several anonymity features that make transactions more secure And Tilray is a Canadian company that supplies the world's leading cannabis for medical facilities Moreover, in recent years, there have been certain changes With Verge, for example, there is a certain change in exchange price status while Tilray has a merger with another leading cannabis supply company as well as the challenges it faces Regarding the closing prices of these two topics, Verge, despite the volatility, overall it is much better than the beginning of the year Meanwhile, Tilray, which had opposite closing prices compared to Verge, within a year its price dropped dramatically When comparing returns, it is evident that the Verge cryptocurrency has a lot more than Tilray When the average profit of Verge is higher.In addition, quarterly investment is also very important when in Q2 and the loss rate is below 50% and vice versa, if investing in Q1 and 12 3, the loss rate is very high Finally, there are risks when there is a change in external factors Suppose there is an economic crisis or a long-term investment At this point, an investment in the cannabis company is at higher risk, even though both subjects face certain losses For Verge, Besides the reason that the analysis shows the development and low risk of the cryptocurrency, It also adds two other reasons to choose to invest First, it is the world's newest and most modern currency, which is the cryptocurrency Besides, with a spike in closing prices in 2020 amounted to $ 0.0091 About Tilray, although after analyzing and having many negative conclusions about the company's future, there are still many reasons and factors for people to invest in this company The first and most important thing is the industry in which the company operates, healthcare In recent years more and more people have been hospitalized Because of that, the hospital needed a large amount of sedative, which was derived from cannabis Besides that The merger between the two leading cannabis companies will also partly help this company to recover from the turmoil in 2020 Reference Manikandan, S 2011, "Measures of central tendency: Median and mode", Journal of Pharmacology and Pharmacotherapeutics, vol 2, no 3, pp 214-215 https://search-proquestcom.ezproxy.lib.rmit.edu.au/docview/880781922/fulltextPDF/D797BAB2C49448EAPQ/1? accountid=13552 Manikandan, S 2011, "Measures of central tendency: The mean", Journal of Pharmacology and Pharmacotherapeutics, vol 2, no 2, pp 140-142 13 https://search-proquestcom.ezproxy.lib.rmit.edu.au/docview/873805047/fulltextPDF/70321AD3A1A8456EPQ/1? accountid=13552 Bhandari, P 2020, Variability | Calculating Range, IQR, Variance, Standard Deviation, Scribbr, viewed 24 April 2021, Capler, R 2009, Why People Use Cannabis | Here to Help, www.heretohelp.bc.ca, viewed 23 April 2021, CoinFI 2021, Latest (XVG) Verge News - Verge Crypto News (May 1, 2021) | CoinFi, www.coinfi.com, viewed 23 April 2021, < https://www.coinfi.com/news/verge > Shah, V 2020, Verge Trades Below $0.0070 yet Holds Support from Daily MAs, NameCoinNews, viewed 23 April 2021, < https://www.namecoinnews.com/verge-tradesbelow-0-0070-yet-holds-support-from-daily-mas/ > 14 Speights, K 2021, Is the Aphria-Tilray Merger in Trouble?, The Motley Fool, viewed 23 April 2021, Tilray Inc 2021, Tilray, Tilray, viewed 24 April 2021, < https://www.tilray.com/ > 15 ... 2020 Part B: Financial Brief Overall, Verge is a 102nd top cryptocurrency It also has several anonymity features that make transactions more secure And Tilray is a Canadian company that supplies... (Bhandari 2020) It is usually measured in five different forms It includes range, interquartile range, standard deviation, sample variance, and coefficient of variation Among them, the standard... reader understands the importance of the analysis as well as the constantly changing state of cryptocurrencies (Shah 2020) The article about company share has four main parts.Firstly, the author