ANOVA- Analysis of variance

Research Hypothesis:
To check whether there exists a significance difference in the change in Closing price
over the years of Amazon.
Sample Information:
Sample information about closing price of Amazon has been considered from the year
2017-2019
Statistical Hypothesis:

 Null Hypothesis:
H0: µ1 = µ2 = µ3

 Alternative Hypothesis:
H1: µi ≠ µj, i ≠ j, i, j=1,2,3
Errors in Hypothesis:

 TYPE 1 ERROR:

P (reject H0 / not reject H0) = α

P (µi ≠ µj / µ1 = µ2 = µ3 ) = 0.05
1- α = 0.95 = Level of Significance

 TYPE 2 ERROR:
P (not reject H0 / reject H0) = β
P (µ1 = µ2 = µ3 / µi ≠ µj) = β
1- β = Power of Test
Assumptions:
1. There exists equality of variance.
2. All the sample under study are random sample.
3. Population is independent and normal.
Construction of test statistic:
Under H0,
F0 = (Between variance / within variance)
We have taken random sample of change in closing price of Amazon in the E-commerce
sector from the year 2017 – 2019

a
ANOVA Table 5%
p-
Source SS df MS F Fcritical value
Betwee 2E+0 5376. 3.007 0.000 Reje
n 4E+07 2 7 3 7 0 ct As we can see in
281971 75 3744. the above table
Within 7 3 6
4.3E+0 75
there exists
Total 7 5 significant
difference between
Tukey test for pairwise comparison of group means
all the years from
      2019      
2017- 2019 of
r 3 2018 Sig 2018  
Amazon
n-r 753 2017 Sig Sig  
q0 3.85         Thus, we can
T 14.8411         conclude that there
              is a significant
difference between
the changes in closing price of Amazon from the year 2017 – 2019.
Research Hypothesis:
To check whether there exists a significance difference in the change in Closing price
over the years of S&P
Sample Information:
Sample information about closing price of S&P indices has been considered from the
year 2017-2019
Statistical Hypothesis:

 Null Hypothesis:
H0: µ1 = µ2 = µ3

 Alternative Hypothesis:
H1: µi ≠ µj, i ≠ j, i, j=1,2,3
Errors in Hypothesis:

 TYPE 1 ERROR:

P (reject H0 / not reject H0) = α

P (µi ≠ µj / µ1 = µ2 = µ3 ) = 0.05
1- α = 0.95 = Level of Significance

 TYPE 2 ERROR:

P (not reject H0 / reject H0) = β

P (µ1 = µ2 = µ3 / µi ≠ µj) = β
1- β = Power of Test
Assumptions:
4. There exists equality of variance.
5. All the sample under study are random sample.
6. Population is independent and normal.
Construction of test statistic:
Under H0,
F0 = (Between variance / within variance)
We have taken random sample of change in closing price of S&P index from the year 2017 –
2019

As we can see in
ANOVA Table 5% the above table
Sourc F there exists
e SS df MS F significant
Betwe 21397 1E+0 210 3.00 difference
en 43 2 6 4
38289 75 508. between all the
Within 6 3 49 years from
25226 75
2017- 2019
Total 39 5
Thus, we can
Tukey test for pairwise comparison of group means
conclude that
      2019      
there is a
r 3 2018 Sig 2018  
significant
n-r 753 2017 Sig Sig  
difference
q0 3.85        
T 5.46894        
between the
              changes in
closing price of
S&P indices from the year 2017 – 2019.