Image by Ennio Pozzetti
In this post I will explore some of the movements in markets in recent years, these movements have caught many by surprise resulting in some people unexpectedly striking it rich while others have lost a great deal. I am no financial advisor, nor do I have a background in financial analysis, so please take everything with a grain of salt. If anything is true about financial markets, they are inherently unpredictable.
I will investigate the relationship between the price of gold and the price of bitstamps, with two competing hypothesizes. One hypothesis is that both goods represent investments that people seek because they are “safe” and “risk minimal”. The mantra “gold always has value” and “bit money does not rely upon government support” both seem to imply this. If this is true then both markets will move together. When the total economy seems uncertain, both will gain in price. When the economy does well, both will lose value as investors shift from safe investments to investments that provide higher expected return. An alternative hypothesis investigated here is that they are seen as competing investments. Thus when the price of gold goes down investors will move into bit currency which will drive the price of bit currency up. Likewise, if the price of bit coins goes down investors will shift to gold which will drive the price of gold up.
Image by Timothy Poulton
A long-standing paradigm among savers and investors is to favor a mixture of 40% bonds and 60% equities. The simple rationale is that stocks will provide greater returns while bonds will serve as a diversifier when
if equities fall. If you are saving for your pension, you probably heard this story before, but do you believe it?
At least in part, this makes sense. Stocks are more volatile and thus should yield more as compensation. Regarding diversification, we can take a stab at it and try to model the correlation between stocks and bonds, but for now let’s assume it holds that bonds will ‘defend’ us during crisis. Today we zoom in on the pain this 60/40 mixture can cause you over the years, and compare it to other alternatives. We use numbers from the last two decades to show that you may want to reconsider this common paradigm.
Synopsis: This is, we think, the best source of historical stock price data on the internet because it is accurate, complete and 100% open.
We added a new source to the site today called Quandl Open Data. We launched it with historical daily stock price data for 500 of the largest US stocks, but we hope to get that number to 4000 this month. This new “source” on Quandl is significant for four reasons.
1 – The Data is Better
This price data is better than anything we have had before (and anything we know of elsewhere on the internet) because it includes dividends, splits and adjustments in one dataset. We calculate adjustments using the CRSP methodology, but the raw dividend and split information empowers any other adjustment methodology you may wish to employ. We update the data as quickly as we can each day.
2 – The Data is Original
Most data on Quandl is sourced from elsewhere on the internet (which we do with zealous transparency.) This new data source is different because it is “original”; the data is manufactured by us and Quandl users. The definitive version of the data actually lives on Quandl and not elsewhere. (This is a first for us.)
3 – The Data is Open
You may copy, distribute, disseminate or include the data in other products for commercial and/or noncommercial purposes. There are no restrictions whatsoever on the use of this data.
Thus we now provide the internet’s first and only totally unencumbered source of historical stock price data.
4 – It’s a Wiki
Quandl Open Data has been assigned the source code “WIKI” for good reason: this data is and will be maintained by our community. We are very excited about this project which is currently being spearheaded by us and a small set of Quandl users. We are inspired of course by Wikipedia: We want nothing less than to permanently place as much financial information as possible into the public domain with absolutely no restrictions on its use.
This project is just getting started. Our thanks to everyone who helped by contributing backfill and helping to clean. There is much more work to be done on this front. The next step is to expand coverage to more stocks. We will eventually open this process up to the entire Quandl community. In the interim it only takes an email to me to get involved right now.
There is now an excellent tutorial on using Quandl via R at DataCamp.com. Datacamp offers really well designed (and free) in-browser tutorials for learning more effective data analysis. Their focus thus far has been on R.
The free interactive Quandl course introduces you to the main functionality in the Quandl R package. In two short chapters you’ll learn how to search through Quandl’s data sets, how to access them, and how you can easily manipulate them for your own purposes. All exercises are based on real-life examples (e.g. Bitcoin exchange rates).
Datacamp is quite impressive; definitely worth a visit!
If you use supersets on Quandl, please note that the URLs for your supersets have changed. Instead of existing under www.quandl.com/USER_XX, they now exist under new source which is your exact username on Quandl.
Taking myself as an example, my superset used to exist at:
but it now exists at
If you are accessing your supersets by API, you need to be aware of this change.
If you have any questions or problems, just drop us a line email@example.com
Quandl is proud to announce a new partnership with data visualization and analytics service DataHero. Now new users looking to better understand DataHero’s functionality will be able to begin their exploring through a selection of sample datasets by Quandl. After signing into the service you will be able to choose from a variety of datasets and import them in a single click. Once loaded you’ll be able to easily create dynamic charts of real estate data, commodities markets, or even your favorite football team! Then you can easily segment and filter your charts, or go deeper with drag-and-drop cohort analysis.