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Comparison between two companies

I am going to compare between two telecom companies that is Tata communication limited and Bharti Airtel limited on the basis of their monthly return of seven years (i.e. from January 2005 to December 2011). On the basis of their monthly return I have drawn out some statistical data and with the help of these data it will be easier to find out the financial status of the company and thus the comparison can be done easily.

The mean of many data are the point around which all the data are centralized. This data will give us the overall performance of the company. Mean of the Tata communication is higher than the mean of the Bharti Airtel. This information gives us the information that Tata communication has performed better than the Bharti Airtel over these seven years.

Standard deviation:
It shows the variance of the data around the mean value. Low standard deviation mean the data are more clustered towards the mean value and high standard deviation mean data are more scattered from the mean value. Standard deviation and the data have the same unit. Standard deviation of the Tata communication is less than the Bharti Airtel. This means that the data of the monthly return of the Tata communication is more clustered towards the mean value than the Bharti Airtel. This data gives us the information that monthly return of Tata communication has low variance and a low risk company for the investor than Bharti Airtel.

In statistic kurtosis is peakedness of the probability distribution of the discrete data. If the value of kurtosis is equal to zero that mean it has normal distribution. If it has value of kurtosis is greater than zero, it has a high peak around the mean compared to normal distribution which leads to thick tails on both sides, this means that the has relatively low amount of variance If kurtosis is less than zero it has a flatter peak around the mean due to which it has thin tail, this is the result of data being less concentrated around the mean and it has large variance around the mean. Kurtosis of Bharti Airtel is more than the Tata communication; this means that Bharti Airtel is a relatively low risk company than Tata communication.

In statistic skewness measures the asymmetry of the probability distribution of random variable. Its value can be positive negative or even not defined. A negatively skewed graph indicates that the tail moves towards the left side of the probability distribution, it means that it will give negative return. It can have a positive value also so , the tail of the graph will move more towards the right. A positively skewed graph gives positive return therefore company having positively skewed graph will give positive return. Tata communication has a negatively skewed graph of its probability distribution of monthly return and Bharti Airtel has a positively skewed graph. This means that Bharti Airtel will give positive return and thus a better option for investor for investment.