Computation of Mean/Average Z-Scores

#1
Hello,

EDIT: I am having trouble uploading my .xls file. I also tried putting the .xls into a .zip but I will always receive an error message. How can I solve this?

I am a college student and have just started my first class of statistics. I am quite good at math (taking calculus) but I am struggling to understand what exactly the Z-Score means and how to compute the average z-score.

My problem is specifically:

I have 254 (n=254) closing prices of the Microsoft Stock (MSFT from yahoo finance) in an excel spreadsheet. I have computed the mean, mode, median, stdev as well as Q1,Q2,Q3 and P90, P50,P10 as well as a few other things (The .xls file is attached)

Column H is where the problem is:

According to my notes, the zscore is computed by Z = (x-mean)/standard deviation. However, what exactly is x? If i want to compute Z1 do I take the first stock price, subtract the mean from it and then divide by the STDEV?

Also, if n=254, will I have 254 Zscores?

I hope these questions are not considered stupid, I am really trying to understand this.

This project is due in about 2 weeks and I have finished the majority of it, but the zscores are throwing me off.

Any help is greatly appreciated!
Thanks in advance!

Kind regards,
sectas
 

gianmarco

TS Contributor
#2
Hi,
I think that this link is quite informative:
http://statistics.laerd.com/statistical-guides/standard-score.php

As you can see, the x is the score you want to "standardize".
In your case, following the calculation of z-scores, you will obtain a number of z-scores equal to the number of values you have in your dataset. The mean value that you have to subtract from each individual value is the mean of your whole sample.

Hope this helps a bit

Best Regards
Gm