IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF APPLIED SCIENCES AND MATHEMATICAL THEORY (IJASMT )

E- ISSN 2489-009X
P- ISSN 2695-1908
VOL. 8 NO. 3 2022
DOI: https://doi.org/10.56201/ijssmr.v8.no1.2022.pg32.40

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A Stochastic Analysis of Some Selected Companies for Capital Market Price Investments

Sunday A.F., Amadi, I.U, and Amadi, U.C

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Abstract

The stock market performance and operation has been widely recognized as a significantly viable investment field in financial markets. Therefore this paper studied stochastic analysis of Markov chain in the closing stock price data of three selected companies (2017-2021) via Nigeria Stock Exchange. The stock prices were transformed into 3-steps transition probability matrix solution for each year. The criteria of obtaining future stock price changes of the year were considered. The analytical solution of stochastic analysis showed that NASCO Nigeria, PLC has the best probability of price increasing in the near future: 19%, which is a tool for proper decision making in terms of investments. In the assessment of future price changes of these three companies OANDO Nigeria, PLC has the highest price of 75% which shows it is profit making organization and are hopeful for future investment plans both short or long term respectively. Finally, percentage increase in the parameters shows percentage decrease in various future price changes over the stipulated trading days.

keywords:

Stochastic Analysis, Stock prices, investments, companies and transition probability matrix

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