Apr 30, 2012

Stock Visualization

I've never really liked stock visualizations. Most visualizations don't seem to compare the stocks against the market. Even those that do are often too short term to see the global behavior of the stock.

The images below are Log-Log plots of individual stocks against the Dow Jones industrial average over the course of each stocks lifespan. The log value of the Dow Jones is on the bottom axis and the value of the stock is on the log value of the stock is the on the vertical axis. The red dot is the current value of the stock.

Stocks do well if the line trends to the top of the chart. The market in general is doing well if it trends to the right. Over time all these graphs trend to the right and the top since I've selected for successful companies.

Maybe the most interesting stocks to look at this way are the older ones.
This is GE. GE has been stably rising alongside the index for much of its mature life except recently. This seems to be true of most stocks. The graphs somewhat look like flowers. The stem of the flower ends around 1997 and the flower begins, signalling that the stock became much less correlated with the Dow Jones.
This plot is for Walmart which shows essentially the same structure as GE above.
IBM is another older stock. You can see the flower at the top left, but it looks like the stock might have recently left the flower head for good.


Microsoft pretty clearly shows the flower pattern, but it not clear that it is leaving the flower region at the top of the stalk.
Apple is a great counter example. The stock was doing pretty poorly most of life until recently. There is no flower pattern in this stock. Things are must less clear in newer companies which have no stalk.
Google's growth has been mostly vertical because it was grown while the Dow Jones hasn't. It's still possible to see though that the value of Google is effected by the Dow Jones, though weakly in how its flower slants.

Compare that to Amazon though. The leaves in its flower are completely horizontal. The changes in the Dow Jones don't seem to affect its value and it climbs up slowly despite them.

So what do these visualizations mean?

Nothing. They're just another stupid stock visualization.