INDIAN COMPANIES (year wise)

Testing ANOVA for the 3 Indian companies:

Random variable: The change in closing stock prices of the different companies for the year on a
daily basis

Parameter under study: Average of the changes in closing stock prices of the company for the year
on a daily basis.

Null hypothesis:

H0: M1=M2=M3 where M1 is the mean of the population 1, M2 the mean of population 2, and M3
the mean of population 3.

Alternative hypothesis:

H1: Mi != Mj , where i,j=1,2,3 and i != j.

Type I error: (Reject H0 | Do not reject H0)

(Mi != Mj when actually, M1=M2=M3)

Level of significance (alpha) is the probability of the occurrence of Type I error. The level of
significance as taken as 5%.

Type II error: (Do not Reject H0 | Reject H0)

(M1=M2=M3 when actually, Mi != Mj)

Construction of test statistic:

For the year 2016

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.5147, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.00028 2 0.0001 0.6671 3.0576 0.5147
Within 0.03111 147 0.0002
Total 0.03139 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys -0.0022 0.0041 95%
TCS 0.00078 0.0041 95%
HCL 0.00073 0.0041 95%

Grand Mean
-0.0002 -0.01 -0.005 0 0.005 0.01

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.00681

For the year 2015

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.9571, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 1.2E-05 2 6E-06 0.0438 3.0576 0.9571
Within 0.02073 147 0.0001
Total 0.02074 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys 0.00029 0.0033 95%
TCS -0.0003 0.0033 95%
HCL 0.00041 0.0033 95%

Grand Mean
0.00015 -0.004 -0.002 0 0.002 0.004 0.006

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.00556

For the year 2014

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.5469, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.00249 2 0.0012 0.6059 3.0576 0.5469
Within 0.30194 147 0.0021
Total 0.30443 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys -0.0093 0.0127 95%
TCS -0.0008 0.0127 95%
HCL -0.0005 0.0127 95%

Grand Mean
-0.0035 -0.03 -0.02 -0.01 0 0.01 0.02

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.02122

For the year 2013

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.6463, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.00014 2 7E-05 0.4377 3.0576 0.6463
Within 0.0237 147 0.0002
Total 0.02385 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys 0.00104 0.0035 95%
TCS 0.00056 0.0035 95%
HCL 0.00282 0.0035 95%

Grand Mean
0.00147 -0.005 0 0.005 0.01

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.00594

For the year 2012

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.6795, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 8.8E-05 2 4E-05 0.3874 3.0576 0.6795
Within 0.01675 147 0.0001
Total 0.01684 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys -0.0003 0.003 95%
TCS -0.0005 0.003 95%
HCL 0.00123 0.003 95%

Grand Mean
0.00015 -0.004 -0.002 0 0.002 0.004 0.006

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.005

For the year 2011

Under H0 (where H0: M1=M2=M3), degrees of freedom is (r-1)(n-r) where r is 3 and n is 150.

Degrees of freedom = 2*147= 294.

F2,147 = 2.60

When critical value of studentized range distribution(q0) corresponding to r and (n-r) degrees of
freedom is 3.31.

Hence, Fcritical = 3.0576

The p-value is 0.6726, which is greater than the level of significance (alpha). Hence the null
hypothesis is not rejected.
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.00027 2 0.0001 0.3977 3.0576 0.6726
Within 0.04956 147 0.0003
Total 0.04982 149
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
Infosys 0.00023 0.0051 95%
TCS 0.0009 0.0051 95%
HCL -0.0022 0.0051 95%

Grand Mean
-0.0004 -0.01 -0.005 0 0.005 0.01

Tukey test for pairwise comparison of group means

Infosys
r 3 TCS TCS
n-r 147 HCL
q 0 3.31
T 0.00859

Conclusion:

The null hypothesis is not rejected which indicates that the average returns obtained by Infosys, TCS
and HCL are equal throughout the 5 consecutive years from 2011 to 2016. Also there is no significan
difference between any of the three companies from the year 2011 to 2016.

Company wise

Random variable: The change in closing stock prices of the company for different years on a daily
basis

Parameter under study: Average of the changes in closing stock prices of the company for different
years on a daily basis.

Null hypothesis:

H0: M1=M2=M3=M4=M5 where M1 is the mean of the population 1, M2 the mean of population 2,
M3 the mean of population 3, M4 is the mean of population 4 and M5 is the mean of population 5.

Alternative hypothesis:

H1: Mi != Mj , where i,j=1,2,3,4,5 and i != j.

Type I error: (Reject H0 | Do not reject H0)

(Mi != Mj when actually, M1=M2=M3=M4=M5)

Level of significance (alpha) is the probability of the occurrence of Type I error. The level of
significance as taken as 5%.

Type II error: (Do not Reject H0 | Reject H0)

(M1=M2=M3=M4=M5 when actually, Mi != Mj)

INFOSYS

a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.00353 4 0.0009 0.7274 2.4085 0.5740
Within 0.29761 245 0.0012
Total 0.30114 249
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
2016 -0.0022 0.0097 95%
2015 0.00029 0.0097 95%
2014 -0.0093 0.0097 95%
2013 0.00104 0.0097 95%
2012 -0.0003 0.0097 95%
Grand Mean
-0.0021 -0.03 -0.02 -0.01 0 0.01 0.02

Tukey test for pairwise comparison of group means

2016
r 5 2015 2015
n-r 245 2014 2014
q 0 3.86 2013 2013
T 0.01903 2012

CONCLUSION

Since the null hypothesis is not rejected the average returns of Infosys is equal throughout from
2012 to 2016. Hence there is no significant difference in the change in closing price of Infosys from
the year 2012 to 2016.

From the graph of confidence interval for group means we can conclude that Infosys had the highest
returns in the FY 2013 and the lowest returns in the FY 2014. Some of the reasons for this decline
were the following;

Infosys revenues grew by 5.8 per cent against a forecast of 6.5 per cent growth. Infosys CEO
S.D.Shibul said the miss was on account of slower deal ramp-ups, pricing decline and adverse cross-
currency impact.
But the company managed to make up the return during the FY 2015 and maintained it without
much loss in FY 2016
TCS

a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 9.4E-05 4 2E-05 0.1308 2.4085 0.9710
Within 0.04383 245 0.0002
Total 0.04392 249
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
2016 0.00078 0.0037 95%
2015 -0.0003 0.0037 95%
2014 -0.0008 0.0037 95%
2013 0.00056 0.0037 95%
2012 -0.0005 0.0037 95%
Grand Mean
-4E-05 -0.006 -0.004 -0.002 0 0.002 0.004 0.006

Tukey test for pairwise comparison of group means

2016
r 5 2015 2015
n-r 245 2014 2014
q 0 3.86 2013 2013
T 0.0073 2012

CONCLUSION

Since the null hypothesis is not rejected the average returns of TCS is equal throughout from 2012 to
2016. Hence there is no significant difference in the change in closing price of TCS from the year
2012 to 2016.

From the graph of confidence interval for group means we can conclude that TCS had the highest
returns in the FY 2016 and the lowest returns in the FY 2014.

The company is progressing well after the decline in FY 2014, as we can see the consistent increase
in returns after 2014.

HCL
 a
ANOVA Table 5%
Source SS df MS F F critical p -value
Between 0.0003 4 8E-05 0.3522 2.4085 0.8424
Within 0.05279 245 0.0002
Total 0.05309 249
Confidence Intervals for Group Means - Plot
Confidence Intervals for Group Means
Grand Mean
Group Confidence Interval 1-a
2016 0.00073 0.0041 95%
2015 0.00041 0.0041 95%
2014 -0.0005 0.0041 95%
2013 0.00282 0.0041 95%
2012 0.00123 0.0041 95%
Grand Mean
0.00093 -0.01 -0.005 0 0.005 0.01

Tukey test for pairwise comparison of group means

2016
r 5 2015 2015
n-r 245 2014 2014
q 0 3.86 2013 2013
T 0.00801 2012

CONCLUSION

Since the null hypothesis is not rejected the average returns of Infosys is equal throughout from
2012 to 2016. Hence there is no significant difference in the change in closing price of HCL from the
year 2012 to 2016.

From the graph of confidence interval for group means we can conclude that HCL had the highest
returns in the FY 2013 and the lowest returns in the FY 2014.

FINAL CONCLUSION
We can see that all the three companies have the lowest returns in the FY 2013-2014.Ths is
because of the biggest disappointment in the full year dollar sales outlook for 2013-14. Also the
companies have recovered from this decline of returns during the succeeding years (2015 and
2016).