Final Project

Daniel Tafmizi

Dr. Friedman

December 3, 2024

Lis 4317

Stock Exchange Analysis

Github: daniel.R/Work.R/LIS4370Rprog/4317FinalProjectCode.R at main · DanielDataGit/daniel.R

Kaggle: Global Stock Exchanges (Cap = 1 trillion+) 04-23

    A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. 

- Stock exchange - Wikipedia

    I was interested in seeing how global stock exchanges compare. I decided to construct my comparison by visualizing the market capitalization and performance of exchanges worth north of One trillion USD. Market capitalization is the sum of all securities in the exchange. This allows us to inspect the economic significance of the exchange. Performance is seen through the overall returns in the exchange. This allows us to inspect the quality and growth potential of the exchange. Through my visualizations, I hope to display the strengths of global markets and exchanges and see which ones excel above others. I retrieved my data from world-exchanges.org statistics portal.

- Mapped: The Largest Stock Exchanges in the World

    I used a few sources to find which exchanges are worth over one trillion USD. I felt this visualization was fitting to add as it includes most of the exchanges I visualized and was a useful source for my research. I decided to use Christmas colors because they are fun and it is Christmas time:)

    My first visualization describes the market capitalization vs listed companies of the chosen exchanges in 2023. I made this graph by sub-setting the necessary data and using ggplot's geom_point function. In it, we see that the United States NYSE and Nasdaq are power horses for business. With a combined market cap of nearly 50 trillion dollars, they leave the global markets in the dust from a capitalization standpoint. We also see that the American exchanges house the most companies by per exchange, followed by Asia-Pacific and Europe-Africa-Middle East. 

  My second visualization describes the returns of the chosen exchanges. I made this graph by preprocessing the data to turn the yearly market caps into cumulative percent changes. Doing this, allowed me to normalize the data and show the returns for each exchange without scaling distortion. I then piped this data into ggthemes geom_tufteboxplot function. I used this as opposed to a line chart because it is easier to see each exchange independently. In it, we see that the NYSE and Nasdaq did not see as much growth as other exchanges. The middle east's Saudi and Tehran exchanges saw growth of 550% and 780%, respectively. Major plays were made in Asia's Shanghai, Shenzhen, and Indian exchanges. These trumped the growth of the NYSE and Nasdaq by multitudes. 

My final visualization leverages the previously processed data in conjunction with some tidyr grouping and summarizing to visualize the overall regions returns based on their exchanges returns. I used gganimate to allow the data to reveal by year and extend the y axis as needed. In it, yet again, we see that the Americas trail behind in terms of percentage growth. Asia - Pacific leads the pack, and their bustling economy and tech regions may be worth some attention. Surprisingly, Europe - Africa - Middle East also beat America in terms of percentage growth. Seeing the data come to life through animation allows us to appreciate the common changes in the global markets, showing the true interconnectedness of our small world.

Descriptive statistics 2023 total amounts: Asia - Pacific = 19,647 companies & 31 trillion & 8 Exchanges, Europe - Africa - Middle East = 4,972 companies & 16.7 trillion & 8 Exchanges, Americas = 9,288 companies & $52.1 trillion & 3 Exchanges

Results) Although the NYSE and Nasdaq house more capitalization then the next 17 exchanges combined, we see that their returns are not as bountiful as the rest. A basic reason for this is that 1 trillion to the NYSE is about 4%, while an addition of 1 trillion to the entire Europe - Africa - Middle East region is about 6.25%.  Nonetheless, it seems that investing globally would be worthwhile. The returns from regions beyond the Americas are booming with growth. The potential is there, and I plan to do more research for personal investments. I accomplished my goals of understanding the dynamics of global stock exchanges through visualization techniques in accordance with Yau's and Few's recommendations. 


Further Research) A pitfall of my analysis is that the regions are not very specific. I used the grouping that the world-exchanges.org statistics portal provided. The issue can be seen in the region summary animation where the grouping of the Middle East and Europe artificially boosted the returns of Europe's market. We can confirm this by checking the exchange return graph. The Tehran and Saudi stock exchanges in the Middle East outperformed European exchanges by a factor of four, while the European exchanges saw similar gains to the Americas. Further research should be done by honing into more specific regions and experimenting beyond the 1 trillion-dollar requirement.