STATISTICS IN REAL

LIFE
ARYAN KUMAR
BCOM SEM 3
 INTRODUCTION
• What is Statistics?
• Statistics is simply defined as the study and manipulation of data. As we have
already discussed in the introduction that statistics deals with the analysis and
computation of numerical data. Let us see more definitions of statistics given by
different authors here.
• According to Merriam-Webster dictionary, statistics is defined as “classified facts
representing the conditions of a people in a state – especially the facts that can be
stated in numbers or any other tabular or classified arrangement”.
• According to statistician Sir Arthur Lyon Bowley, statistics is defined as “Numerical
statements of facts in any department of inquiry placed in relation to each other”.
• Statistics Examples
• Some of the real-life examples of statistics are:
• To find the mean of the marks obtained by each student in the class whose strength is 50. The average value here is
the statistics of the marks obtained.
• Suppose you need to find how many members are employed in a city. Since the city is populated with 15 lakh
people, hence we will take a survey here for 1000 people (sample). Based on that, we will create the data, which is
the statistic.
• Basics of Statistics
• The basics of statistics include the measure of central tendency and the measure of dispersion. The central
tendencies are mean, median and mode and dispersions comprise variance and standard deviation. 
• Mean is the average of the observations. Median is the central value when observations are arranged in order. The
mode determines the most frequent observations in a data set.
• Variation is the measure of spread out of the collection of data. Standard deviation is the measure of the dispersion
of data from the mean. The square of standard deviation is equal to the variance.
• Mathematical Statistics
• Mathematical statistics is the application of Mathematics to Statistics, which was initially conceived as the
science of the state — the collection and analysis of facts about a country: its economy, and, military,
population, and so forth.
• Mathematical techniques used for different analytics include mathematical analysis, linear algebra,
stochastic analysis, differential equation and measure-theoretic probability theory.
• Types of Statistics
• Basically, there are two types of statistics.
• Descriptive Statistics
• Inferential Statistics
• In the case of descriptive statistics, the data or collection of data is described in summary. But in the case of
inferential stats, it is used to explain the descriptive one. Both these types have been used on large scale
• Descriptive Statistics
• The data is summarised and explained in descriptive statistics. The summarization is done from a population
sample utilising several factors such as mean and standard deviation. Descriptive statistics is a way of organising,
representing, and explaining a set of data using charts, graphs, and summary measures. Histograms, pie charts,
bars, and scatter plots are common ways to summarise data and present it in tables or graphs. Descriptive
statistics are just that: descriptive. They don’t need to be normalised beyond the data they collect.
• Inferential Statistics
• We attempt to interpret the meaning of descriptive statistics using inferential statistics. We utilise inferential
statistics to convey the meaning of the collected data after it has been collected, evaluated, and summarised. The
probability principle is used in inferential statistics to determine if patterns found in a study sample may be
extrapolated to the wider population from which the sample was drawn. Inferential statistics are used to test
hypotheses and study correlations between variables, and they can also be used to predict population sizes.
Inferential statistics are used to derive conclusions and inferences from samples, i.e. to create accurate
generalisations.
 MEAN
• What is the Mean?
• The mean in math and statistics summarizes an entire dataset with a single
number representing the data’s center point or typical value. It is also
known as the arithmetic mean, and it is the most common measure of
central tendency. It is frequently called the “average.”
 USE OF MEAN
• The mean can be used to represent the typical value and therefore
serves as a yardstick for all observations.
• For example, if we would like to know how many hours on average an
employee spends at training in a year, we can find the mean training hours
of a group of employees. This mean can then be used to compare against an
individual’s annual training hours to judge if he has had comparable
opportunity for training as his colleagues. Similarly, to compare the annual
training hours of a smaller group against a more comprehensive group, their
respective means can be used. An example would be comparing the mean
number of annual training hours for women and for all employees.
• The mean is useful for further calculations.
• Say we were trying to find how much it would cost a company to
give each worker a 5%-wage increase. This can be done even if we
only know the mean wage of the company and the number of
employees, but not the exact wage of each of them. Since the
mean is just the total value divided by the number of data points,
the total cost of a 5% wage increment for all workers sums up to
5% of the mean multiplied by the number of workers. 
 VARIANCE
• Variance is the expected value of the squared variation of a random
variable from its mean value, in probability and statistics.
Informally, variance estimates how far a set of numbers (random)
are spread out from their mean value.
• The value of variance is equal to the square of standard deviation,
which is another central tool.
• Variance is symbolically represented by σ2, s2, or Var(X).
 USES OF VARIANCE
• Statistical tests such as variance tests or the
 analysis of variance (ANOVA) use sample variance to assess group
differences of populations. They use the variances of the samples to assess
whether the populations they come from significantly differ from each
other.
• Properties
• The variance, var(X) of a random variable X has the following properties.
1.Var(X + C) = Var(X), where C is a constant.
2.Var(CX) = C2.Var(X), where C is a constant.
3.Var(aX + b) = a2.Var(X), where a and b are constants.
4.If X1, X2,……., Xn are n independent random variables, then 
• Var(X1 + X2 +……+ Xn) = Var(X1) + Var(X2) +……..+Var(Xn).
EMPIRICAL
STUDIES
PRICES OF RELIANCE INDUSTRIES LTD.
Date Price
Mar-23 2,331.05
Feb-23 2,322.55
Jan-23 2,353.85
Dec-22 2,547.20
Nov-22 2,731.35
Oct-22 2,549.60
Sep-22 2,377.75
Aug-22 2,637.95
Jul-22 2,509.45
Jun-22 2,595.65
May-22 2,632.65
Apr-22 2,790.25
Mar-22 2,634.75
Feb-22 2,359.55
Jan-22 2,386.60
Dec-21 2,368.15
Nov-21 2,405.40
Oct-21 2,536.25
Sep-21 2,519.25
Aug-21 2,258.15
Jul-21 2,035.30
Jun-21 2,110.65
May-21 2,160.30

MEAN 2,441.5
VARIANCE 37547.1
STANDARD DEVIATION 7023.6
PRICES OF ADANI ENTERPRISES LTD
Date Price
Mar-23 1,750.45
Feb-23 1,363.85
Jan-23 2,973.90
Dec-22 3,858.35
Nov-22 3,917.90
Oct-22 3,347.45
Sep-22 3,455.75
Aug-22 3,194.35
Jul-22 2,569.20
Jun-22 2,190.90
May-22 2,167.55
Apr-22 2,332.00
Mar-22 2,014.75
Feb-22 1,644.45
Jan-22 1,714.95
Dec-21 1,709.45
Nov-21 1,662.85
Oct-21 1,423.60
Sep-21 1,468.10
Aug-21 1,587.60
Jul 2021 D 1,420.25
Jun-21 1,507.55
May-21 1,316.30

MEAN 2,199.6
VARIANCE 714906.5
STANDARD DEVIATION 845.5
 PRICES OF ITC LTD
Date Price
Mar-23 383.5
Feb-23 376.7
Jan-23 352.35
Dec-22 331.55
Nov-22 340
Oct-22 348.7
Sep-22 332.2
Aug 2022 E 320.5
Jul-22 303.05
Jun-22 273.5
May-22 270.65
Apr-22 259.55
Mar-22 250.65
Feb-22 215.85
Jan-22 220.2
Dec-21 218.05
Nov-21 221.15
Oct-21 223.2
Sep-21 236.15
Aug-21 211.3
Jul-21 204.95
Jun 2021 E 202.7
May-21 216.6

MEAN 274.5
VARIANCE 3744.0
STANDARD DEVIATION 61.2
PRICES OF COAL INDIA LTD
Date Price
Mar-23 213.65
Feb-23 215.4
Jan-23 224.85
Dec-22 225.05
Nov-22 227.25
Oct-22 245.95
Sep-22 212.25
Aug-22 234.8
Jul-22 211.25
Jun-22 185.6
May-22 192.9
Apr-22 182.85
Mar-22 183.05
Feb-22 169.55
Jan-22 159.8
Dec-21 146.05
Nov-21 152
Oct-21 164.45
Sep-21 185.1
Aug-21 145.85
Jul-21 143.3
Jun-21 146.65
May-21 147.7

MEAN 187.6
VARIANCE 1104.4
STANDARD DEVIATION 33.2
 PRICES OF INFOSYS LTD
Date Price
Mar-23 1,427.95
Feb-23 1,487.55
Jan-23 1,533.75
Dec-22 1,508.20
Nov-22 1,634.95
Oct-22 1,537.65
Sep-22 1,413.45
Aug-22 1,492.95
Jul-22 1,549.70
Jun-22 1,461.90
May-22 1,503.60
Apr-22 1,567.55
Mar-22 1,906.85
Feb-22 1,715.60
Jan-22 1,736.20
Dec-21 1,887.75
Nov-21 1,712.65
Oct-21 1,667.75
Sep-21 1,675.20
Aug-21 1,706.45
Jul-21 1,610.50
Jun-21 1,580.80
May-21 1,393.75

MEAN 1,596.2
VARIANCE 19282.0
STANDARD DEVIATION 138.9
 CONCLUSION
• Standard Deviation is a measure which shows how much variation (such as spread,
dispersion, spread,) from the mean exists. The standard deviation indicates a
“typical” deviation from the mean. It is a popular measure of variability because it
returns to the original units of measure of the data set.  Like the variance, if the data
points are close to the mean, there is a small variation whereas the data points are
highly spread out from the mean, then it has a high variance. Standard deviation
calculates the extent to which the values differ from the average. Standard Deviation,
the most widely used measure of dispersion, is based on all values. Therefore a
change in even one value affects the value of standard deviation. It is independent of
origin but not of scale. It is also useful in certain advanced statistical problems.
 CONCLUSION
• If we take a look of the above data of the different companies ,we found that that
the standard deviation of reliance industries ltd to be very high 7023.6 as compared
to other companies which means that it is highly volatile.But the standard deviation
of coal India ltd is very less 33.2 which merans that it is less volatile.
• As a result of the above empirical study we come to the conclusion that investing in
securities of coal India ltd in comparison to other four companies mentioned above,
will give a positive return as it is less volatile.
• Higher the standard deviation higher the risk ,lower the standard deviation lower the
risk.