Assignment has Three task. We can choose two task from three.both tasks should be applied inPython, R, Power Bi or Tableau and work should be reproducible with supporting evidence such as system...

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Answered Same DayNov 07, 2023

Answer To: Assignment has Three task. We can choose two task from three.both tasks should be applied...

Atul answered on Nov 08 2023
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Task Two: Developing an application to Reveal a Stylized Fact in Financial Data
Introduction:
In this task, we will develop an application to process finan
cial data and uncover a stylized fact. Stylized facts are recurring empirical patterns observed in financial data. These patterns can provide valuable insights for investors, analysts, and policymakers. The application will be developed using Python, and we will use historical stock price data to reveal a stylized fact.
Stylized Fact:
For this task, we will focus on the "Mean Reversion" stylized fact in financial markets. Mean reversion is a phenomenon where asset prices tend to revert to their historical mean or average over time. This concept is widely observed in financial markets and can be applied to trading and investment strategies.
Development of the Application:
To develop the application, we will follow these steps:
1. Data Collection: We need historical stock price data for a specific asset. We will use Python libraries like Pandas and yfinance to fetch historical stock data from Yahoo Finance.
2. Data Preprocessing: We will clean and preprocess the data, ensuring that it is in a format suitable for analysis. This includes handling missing values, adjusting data frequency, and calculating relevant statistics.
3. Mean Reversion Analysis: We will calculate a rolling mean and rolling standard deviation of the asset's prices. The rolling mean will represent the historical average price, and the rolling standard deviation will provide a measure of volatility.
4. Visualization: We...
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