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SUMMATIVE ASSIGNMENT – PROJECT 1

Introduction

This big data analytics project provides the opportunity for you to conduct research and analysis on a topic of interest.  Your project must recite some of the data visualisation, descriptive analytics, and predictive analytics topics covered in our module.  Further details follow:

Stock Price Crash Risk

The goal of this project is to build a one year ahead stock price crash risk prediction model.  Thus, you are required to prepare descriptive analyses, produce data visualisations, and develop suitable a regression model(s) to be used by a financial institution to help predict and identify US publicly listed firms with a high expected probability of experiencing future period stock price crashes.

Data Sets

· Crash Risk Data Variable Definitions.docx

· Crash Risk Data.xls

Descriptive Analytics

You are required to provide a full descriptive analysis for all variables included in the Crash Risk Data.xls data set, including the following parameters, mean, standard deviation, range, Skewness and kurtosis. You are also required to use some graphical presentations.

You can visualise the described data set using Tableau and make use of the relevant heat map to the data set.

Predictive Analytics

You need to use panel data regressions to provide predictive analysis for your models, showing whether you will be using fixed or random effects as your main test and the other one as your sensitivity analysis using the Hausman test. You need also to discuss the models sufficiency and strength, using the appropriate parameters. In relation to the different variables, you need to discuss the level of significant relationship between the dependent and independent variables.

Additional Instructions:

1. Please use STATA to run the different types of analytics, unless otherwise specified.

2. You must include snapshots of the STATA outputs in your appendices.

3. Any Tableau maps outcomes presented, need to be discussed in a cohesive fashion with the STATA results.

4. Please use appropriate references and citations when making any interpretations to your findings. 

Overall word limit: 1,500 Words