Simplified stock price simulation in Python [14 lines of code] using Monte Carlo methods

Hi everyone,
this video is showing how you can simulate stock prices using Python. The assumptions are simplified and there are a lot of potential possible improvements.

#Python #Finance #Stockpricesimulation

[neuvocastezero]

Thanks, great video. Is there a way to evaluate these plots for edge?

[mmorpe]

Loved your videos, subscribed and now addicted to them. It would have been great to also have considered GBM in your video. May be in future videos.

[flyingsalmon]

Wonderful video. Lots of statistical concepts involved in the setup although the actual code looks very simple. Question about the output however...with 100 simulations and different prices shown in the plot, how do we interpret it? I mean the lines are all over the place with huge variance. How should we read the plot...can you please explain briefly in the reply? Thank you!

[hyungjoohnkim]

Could you please explain why you set the 'returns' as 'np.log' which is different from the setting of 'cumprod()' on the previous video? If they are different, could you explain their cons & pros?

[rrtt]

hi, why cumprod() when simulating stock prices? thank you so much

[a.ammann]

Hi, great Video :)

Could you make an extension, how to do this with a multi asset portfolio (e.g. multiple stocks or even bonds included)?

Cheers

[risalandipr]

How to get average each point in simulation?

[djrkm]

it says:

ModuleNotFoundError Traceback (most recent call last)
Cell In [7], line 1
----> 1 import yfinance as yf
2 import numpy as np
3 import matplotlib.pyplot as plt

ModuleNotFoundError: No module named 'yfinance'

what do I do?

[VaishnaviBhardwaj-dc]

the returns you took were log returns, shouldn't we be doing cumSum instead of cum prod?
so price = initial price * exp( cum_sum(1+log(r)) at each time from time ranging from 1 to 252

[TheGermanenrique]

Hello again mate, i have this issue in my terminal: " ERROR: pip's dependency resolver does not currently take into account all the packages that are installed. This behaviour is the source of the following dependency conflicts.
yahoo 0.1 requires requests==1.1.0, but you have requests 2.25.1 which is incompatible."

[fauziatahir]

line 9 & 15 is causing issues, any idea why i am getting (Length of passed values is 250, index implies 1)

[benjamintreitz]

You called this video "simplified" stock price simulation. How would you make it more realistic?