So now we're going to talk about a quantitative assessment of our stock and mathematical

indicators. The first indicator is a moving average. A moving average is a mathematical indicator
that integrates stock closing prices into a price line. If the company's closing price is higher than
the average, it may signal that the stock is performing well. If the stock's closing price is lower
than the average, it may be in decline.

When we look at Ben's chart in Part A of the project for Apple's stock, we can calculate the
average for the 12-month period we've chosen by dividing the total of the closing prices by the
number of periods. The average result of this calculation is roughly $141. Since the 12-month
moving average is less than the October 2021 closing price of $142, the stock is in an uptrend,
and the closing share price is likely to climb.

A second indicator can be a transition matrix is also a mathematical indicator that may be
utilized in quantitative research. It can assist in determining whether or not a stock is performing
successfully. The transition matrix depicts the likelihood that a specific period will be bullish,
stagnant, or bearish. A bullish stock is one that investors predict will exceed past closing prices
and gain in value. A bearish stock is one in which investors expect the company to underperform
and the closing price to fall compared to previous levels. The stock increases slowly or not at all
during a stagnant time. If a stock has several bullish phases, it is more likely to do well in the
future, and this factor is considered when deciding whether or not to buy a stock.

We can see from Oliver's estimates in part C that stocks in the S&P 500 are doing well. During
the last 52 weeks, 45 percent have been bullish, while just 15 percent have been bearish. This
suggests that the S&P 500's business stocks are performing well. We can observe from the chart
in Part A that there were seven bullish months and only five bearish months in the price of Apple
shares. This shows that Apple's stock is performing well overall, and it is reasonable to expect
the stock to rise.

A stock's average rate of change is a third mathematical indication of its success. The rate of
change estimates the robustness of a stock's price. The average price rate of change represents
the secant line of the stock price. When a stock has a significant positive rate, its price rises until
it meets or exceeds the moving average price. A stock price with a negative rate of change
decreases until it falls below the moving average. An investor may use this data and other
statistics to determine if a stock is performing well and beneficial to invest in it. When Ben
conducted a quantitative analysis, he determined that the average price rate of change for Apple
shares over 12 months is +2.16. This information by itself is inadequate to decide whether you
should buy Apple stock. It does, however, indicate that Apple is doing well and will continue to
do so in the foreseeable future.
Finally, unlike the average price rate of change, which produces the secant line over time,
calculating the derivative is a mathematical measure of whether or not a stock is performing
well. The derivative is the instantaneous price rate of change at a certain period resulting from a
tangent line. If the derivative exceeds zero, the stock price has climbed. If it is less than zero, it
indicates that the price is falling. An investor might use a derivative to determine how many
times the price climbs versus drops. Now that investors know whether a stock is performing
well, they may use the derivative to decide when to buy and sell. The critical profit rule is to buy
low and sell high. The price derivative will reflect when a low (local minimum) or high (local
maximum) point occurs. The stock may do better if it has a greater positive instantaneous rate of
change. Figure three in Wanjing Liu's Part B shows that Apple stock is positive 60% of the time
during 12 months. This means that Apple's stock price has risen more than it has fallen, showing
that it is doing well.