Create Statistical-Significance-in-GME-Price-Action.md

Technical-Analysis/Statistical-Significance-in-GME-Price-Action.md

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+Y'all, this is statistically significant action!
+================================================
+
+**Author: [u/oaf_king](https://www.reddit.com/user/oaf_king/)**
+
+[💎🙌](https://www.reddit.com/r/GME/search?q=flair_name%3A%22%F0%9F%92%8E%F0%9F%99%8C%22&restrict_sr=1)
+
+Warning: more confirmation for your bias ahead.
+
+Edits to provide more clarity (part TL;DR, part context for the post):
+
+-   I am analyzing the run-up in January with the price points this week. Specifically, I am comparing the dates January 6 to 28 (inclusive) with February 17 up to the present, using price points from those dates.
+
+-   I use statistics, particularly a test called *Spearman's Rank-Order Correlation* to evaluate the data. This technique produces Spearman's Rho (*ρ*) as a measure of correlation; the closer to 1 that this value is, the stronger the correlation between two data sets.
+
+-   P-values are also provided. In statistics, a p-value less than 0.05 is considered statistically significant. That is to say, random chance does not explain the correlation; there would have to be an external explanation.
+
+-   In short: History is rhyming hard.
+
+-   I've added a chart comparing the volume. As of March 3, *ρ* = 0.7364 with p-value (2-tailed) = 0.00976
+
+-   I wrote a [follow-up post](https://www.reddit.com/r/GME/comments/lxhatz/some_additional_thoughts_on_statistical_analysis/) with additional ideas
+
+-   [March 4 update](https://www.reddit.com/r/GME/comments/lxwv8r/statistical_analysis_march_4_update_pricing/)
+
+-   [March 5 update](https://www.reddit.com/r/GME/comments/lyndkf/statistical_analysis_march_5_update_you_love_to/)
+
+-   [March 8 update](https://www.reddit.com/r/GME/comments/m0quxn/statistical_analysis_march_8_update_are_you_not/) (final one in series)
+
+---
+
+I wrote [a post](https://www.reddit.com/r/GME/comments/lwsiai/just_for_fun_for_your_confirmation_bias_needs/) (which explains some of the math behind what's in this post) before market open today, which calculated the correlation between the run-up in January and what we're seeing this past week. I've updated the math with today's high price of $127.75 and closing price of $124.18.
+
+-   Spearman's Rho (*ρ*) for the high price test = 0.8334, with a p-value (2-tailed) of 0.00311. Prior to market open, the values were *ρ* = 0.8303 with p-value = 0.00294
+
+-   Spearman's Rho (*ρ*) for the closing price test = 0.9455, with a p-value (2-tailed) of 1E-05 (that's more or less 0.00001). Prior to market open, the values were *ρ* = 0.9273 with p-value = 0.00011
+
+Given the p-values, we're deep in this zone of statistical significance here. However, this doesn't mean we can pinpoint the cause (for correlation =/= causation).
+
+For those who prefer visuals:
+
+[![r/GME - Y'all, this is statistically significant action!](https://preview.redd.it/unj4z4mkovk61.png?width=925&format=png&auto=webp&s=0f7cf52cfbdc7efd0893d0128c27227a96654b3b)](https://preview.redd.it/unj4z4mkovk61.png?width=925&format=png&auto=webp&s=0f7cf52cfbdc7efd0893d0128c27227a96654b3b)
+
+With the daily close of $124.18, the correlation is stronger than it was yesterday.
+
+I'm beyond ecstatic. We saw a dip early on today and another in the latter half, with a *very* tight battle along the $119 and $121 band, but still ended up with a high price and a close price that reinforces the correlation. What's incredible about today is that this happened:
+
+-   while the SP500 went down (notice how it dipped hard during power hour)
+
+-   without the Short Sale Restriction rule getting triggered
+
+-   with dramatic action in the last 15 minutes; today's result is like the jump from January 20 ($39.12 close) to January 21 ($43.03 close)
+
+GME continues to hold its ground, and I'm confident retail investors are fish partaking in a battle between whales.
+
+Tomorrow and Friday will provide more numbers to work with, and I dare say: Based on the current numbers, the next few trading days may be the final opportunity to grab a seat on the rocket before take off, this time potentially more dramatic than the run-up in January.
+
+Edited to add: Volume
+
+Here is a chart comparing the volume. Again, I'm using the trading dates January 6 to January 28 (inclusive) and comparing them with February 17 to the present day.
+
+[![r/GME - Y'all, this is statistically significant action!](https://preview.redd.it/gx6ltmwrawk61.png?width=1036&format=png&auto=webp&s=79693262e98310cd7fd7dcb5567192bfa5abbb08)](https://preview.redd.it/gx6ltmwrawk61.png?width=1036&format=png&auto=webp&s=79693262e98310cd7fd7dcb5567192bfa5abbb08)
+
+A comparison of the volume between the two data sets.
+
+Using *Spearman's Rank-Order Correlation* test, *ρ* = 0.7364 with p-value (2-tailed) = 0.00976. As the p-value is less than 0.05, the numbers are statistically significant, and one can claim that there's correlation between the volumes. Not to the extent as the pricing, however.
+
+As usual: this is not meant to be financial advice, but material that shows how much I like the stock. For those versed in statistical analysis, please provide your thoughts on the results.