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Silver-the Poor Man’s Gold: An Analysis

Journal: AIMS International Journal of Management (Vol.6, No. 3)

Publication Date:

Authors : ; ;

Page : 187-197

Keywords : September Effect; Granger Causality; Correlation; Randomness;

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Abstract

The present paper attempts to analyze the silver commodity as an investment option and tries to identify the month impact on the silver prices. For the analysis there are deviations in the collection of data depending upon the objective and the availability of the data for the same. For the purpose of analyzing the yearly trends the data were collected for years starting from January 1813 till December 2010. The statistical techniques like Kurtosis, Skewness, Jarqua-Bera Test and Augmented Dickey Fuller Test have been used to analyze the trends. In order to study the month impact Granger Causality Test has been used for the closing month prices data for the period 1984 to 2010. For establishing the relationship between gold, silver, platinum and palladium the data were collected on daily basis for previous 15 years starting from the year January 1, 1984 till May 1, 2011. To check the randomness/efficiency the Z test has been applied. It was found that the risk in silver prices is low as compared to its group including gold, platinum and palladium. September effect is visible and it provides useful information to predict future silver returns for all the months. On the basis of findings the investment in physical silver is recommended for the investors with the long period horizon.

Last modified: 2017-04-27 20:12:20