Robust Methods of Assessing Fidelity Bank Share Price Movements in Nigeria Stock Market

  • Amadi, I.U Department of Mathematics/ Statistics Captain Elechi Amadi polytechnic, Rumuola PortHarcourt,Nigeria
  • Howard, C. Department of Mathematics/Statistics University of Africa Toru-Orua, Bayelsa State, Nigeria
  • Azor, P. A. 3Department of Mathematics and Statistics, Federal University Otuoke
Keywords: Markov Chain, PCA, Share price, Transition matrix and Stochastic Analysis

Abstract

Markov chain is a viable tool for studying the share price formation; since each finite state communicates for proper management decisions in Fidelity bank. Therefore, this paper studied stochastic analysis of Markov chain and PCA in the closing share price data of Fidelity (2016-2022) in Nigeria Stock Exchange. The share prices were transformed into 3-steps transition probability matrix solution to cover this number of years. The future share prices changes were known. The criteria of obtaining four share prices which formed 2x2 matrices were given and analytical solution of principal component were considered for future stock price changes. From the solution matrix of stochastic analysis, showed that Fidelity bank, PLC has the best probability of price increasing in the near future: 10%, best probability of reducing in future by 23% and best probability of no-change in the near future by 22% which is a tool for proper decision making in the day-to-day management of the bank; which shows it is profit making organization and are hopeful for future investment plans both short or long term respectively.

Downloads

Download data is not yet available.

References

Agwuegbo, S. O., Adewole A. P. and Maduegbuna A. N.(2010). A random walk model for stock market prices. Journal of Mathematics and Statistics 6 (3). 342-346, 2010 ISSN
1549-3644.
Amadi, I. U. and Vivian, M. J. 2022).A Stochastic Analysis of Stock Price Variation Assessment in Oando Nigeria, plc. International Journal of Mathematical Analysis and Modelling. 6( 2), 216-228.
Amadi, I. U. and Wobo, G. O., (2021).A Mathematical Model Analysis for Estimating Stock Market Price Changes, International Journal of Applied Science and Mathematical Theory E. 8(2), 20-22.
Amadi I.U, Ogbogbo C.P. and Osu, B. O.(2022).Stochastic Analysis of Stock Price Changes
Markov Chain in Finite States. Global Journal of Pure and Applied Sciences.
28(8):91-98.Doi: https://dx.doi.org/10.4314/gipas.v28i1.11
Aparna Bairagi and Sarat Ch. Kakaty ( 2012).Markov Chain Modelling for Prediction on Future Market Price of Potatoes with Special Reference to Nagaon District. Journal of Business Management (IOSR-JBM), 19(12), 25-31.
Chang,C.W. and Jonathan Z. Z. (2016).The Effects of Channel Experiences and Direct Marketing on Customer Retention in Multichannel Setting, Journal of Interactive Marketing.36,77-90.
Chun-Wei C. (2012).Multichannel Marketing and Hidden Markov Models, University of Washington, ISSN 4289-009x P-ISSN 2695 - 4589
Doroshkevych, K., Maslak, O., Voronovska, V. and Salata, I. (2020).Use of Markov Chains for Modelling Processes of Strategic Planning of Innovative activity of the Enterprise. WSEAS transactions on environment and development. Doi: 10. 37394/232015.2020.16.44
Haiying C, Wei, Z, Chaoden Y. and Hongxiu, C .(2021).Research on Marketing Prediction Model Based on Markov Prediction. Wireless Communications and Mobile Computing 4(12):1-9 doi: 10.1155/2021/4535181
Lakshmi G. and Jyothi M. (2020).Application of Markov Process for Prediction of Stock Market Performance, International Journal of Recent Technology and Engineering (IJRTE) ISSN: 2277-3878, 8 ( 6) Leticia de Ameida Garcia Silva, Joáo Victor Machado
Mettle,F. O., Enoch, N. B. Q. and Ravenhill, A. L.(2014). A methodology for stochastic analysis of share prices as Markov chains with finite states. Springerplus.2014;3:657 doi: 10.1186/1801-3-657
Nkemnole,E.B. and Okafor,S.N.(2020).Markov Chain applied to Returns on Stock Prices. Benin Journal of Statistics, ISSN 2682-5767 Vol.3,pp 142-159(2020).
Ochieng, S. O. (2019). Application of Markov Chain Model in Career Progression of University Academic Staff: A case study of the MOU University- ECDORET Kenya. A Research Project presented in Partial Fulfillment of the requirements for the Degree of Master of Science in Applied Statistics. School of Mathematics, Statistics and Actuarial Science.
Oseni, B. A. and Femi, A. (2013).On the Use of Markov Analysis in Marketing of Telecommunications Product in Nigeria. International Journal of Mathematics and Statistics Studies 1(1), 63-68.
Osu, B.O., Emenyonu, S.C., Ogbogbo, C.P. and Olunkwa, C.(2019). Markov Models on Share Price Movements in Nigeria Stock Market Capitalization, Applied Mathematics and Information Sciences an International Journal,5(2) 1-9.

Udom, A.U.(2015). Elements of Applied Mathematical Statistics, second Edition, University of Nigeria Press Limited, Enugu State,Nigeria.

Zhang, D. and Zhang, X. (2016). Study on Forecasting Stock Market Trend based on Stochastic Analysis Method. International Journal of Business and Management. .4(6), 8-12.
Published
2024-05-08
How to Cite
I.U, A., C., H., & P. A., A. (2024). Robust Methods of Assessing Fidelity Bank Share Price Movements in Nigeria Stock Market. GPH - International Journal of Mathematics, 7(04), 01-13. https://doi.org/10.5281/zenodo.11151690