Python and Statistics for Financial Analysis

Course outline and certification by The Hong Kong University of Science and Technology

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Key Points About This Course

Duration: 4 Days
Time: 9.00am-5.00pm
Public Class Fee: RM 4,500.00
Virtual Class Fee: RM 3,825.00
HRDF Claimable

Course Overview

Python is now becoming the number 1 programming language for data science. Due to python’s simplicity and high readability, it is gaining its importance in the financial industry.  The course combines both python coding and statistical concepts and applies into analyzing financial data, such as stock data.

By the end of the course, you can achieve the following using python:

  • Import, pre-process, save and visualize financial data into pandas Dataframe
  • Manipulate the existing financial data by generating new variables using multiple columns
  • Recall and apply the important statistical concepts (random variable, frequency, distribution, population and sample, confidence interval, linear regression, etc. ) into financial contexts
  • Build a trading model using multiple linear regression model 
  • Evaluate the performance of the trading model using different investment indicators

Jupyter Notebook environment is configured in the course platform for practicing python coding without installing any client applications.

Skills You Will Gain

  • Statistical Analysis
  • Financial Analysis
  • Financial Data Analysis
  • Python Programming
  • Data Visualization (DataViz)

Course Content

Part 1: Visualizing and Munging Stock Data

Why do investment banks and consumer banks use Python to build quantitative models to predict returns and evaluate risks? What makes Python one of the most popular tools for financial analysis? You are going to learn basic python to import, manipulate and visualize stock data in this module. As Python is highly readable and simple enough, you can build one of the most popular trading models – Trend following strategy by the end of this module!

  • Packages for Data Analysis
  • Importing data
  • Basics of Dataframe
  • Generate new variables in Dataframe
  • Trading Strategy

Part 2: Random Variables and Distribution

In the previous module, we built a simple trading strategy base on Moving Average 10 and 50, which are “random variables” in statistics. In this module, we are going to explore basic concepts of random variables. By understanding the frequency and distribution of random variables, we extend further to the discussion of probability. In the later part of the module, we apply the probability concept in measuring the risk of investing a stock by looking at the distribution of log daily return using python. Learners are expected to have basic knowledge of probability before taking this module.

  • Outcomes and Random Variables
  • Frequency and Distributions
  • Models of Distribution

Part 3: Sampling and Inference

In financial analysis, we always infer the real mean return of stocks, or equity funds, based on the historical data of a couple years. This situation is in line with a core part of statistics – Statistical Inference – which we also base on sample data to infer the population of a target variable.In this module, you are going to understand the basic concept of statistical inference such as population, samples and random sampling. In the second part of the module, we shall estimate the range of mean return of a stock using a concept called confidence interval, after we understand the distribution of sample mean.We will also testify the claim of investment return using another statistical concept – hypothesis testing.

  • Population and Sample
  • Variation of Sample
  • Confidence Interval
  • Hypothesis Testing

Part 4: Linear Regression Models for Financial Analysis

In this module, we will explore the most often used prediction method – linear regression. From learning the association of random variables to simple and multiple linear regression model, we finally come to the most interesting part of this course: we will build a model using multiple indices from the global markets and predict the price change of an ETF of S&P500. In addition to building a stock trading model, it is also great fun to test the performance of your own models, which we will also show you how to evaluate them!

  • Association of random variables
  • Simple linear regression model
  • Diagnostic of linear regression model
  • Multiple linear regression model
  • Evaluate the strategy

Training Schedule

Currently this course is available for private group only. Please contact us for any enquiries.

  • Public Class Training

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  • Participant List

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  • Examination (Optional)

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