Prompts for Stock Analysis Using Geometric Brownian Motion Parameters

Here are comprehensive prompts you can use to conduct similar drift and volatility analyses for any stock. These prompts are designed to help you understand a stock's historical behavior and potential future price movements based on geometric Brownian motion modeling.

Basic Stock Parameter Analysis Prompt

Analyze [TICKER_SYMBOL] stock using geometric Brownian motion parameters. Calculate the daily and annualized drift and volatility based on 10 years of historical data. Include expected annual returns and a comparison of different time periods (10-year, 5-year, 3-year, and 1-year). Also provide a brief overview of what these parameters suggest about the stock's risk-return profile.

Example: "Analyze AAPL stock using geometric Brownian motion parameters. Calculate the daily and annualized drift and volatility based on 10 years of historical data. Include expected annual returns and a comparison of different time periods (10-year, 5-year, 3-year, and 1-year). Also provide a brief overview of what these parameters suggest about the stock's risk-return profile."

Detailed Stock Analysis with Future Projections Prompt

Perform a comprehensive analysis of [TICKER_SYMBOL] using geometric Brownian motion modeling. Calculate drift and volatility parameters from 10 years of historical data, and use these to simulate 1,000 potential price paths for the next year. Report the 5th, 25th, 50th, 75th, and 95th percentile prices at the end of the simulation period. Include rolling volatility and drift analysis to identify trends in the stock's behavior. Compare the stock's parameters with its sector average and explain what the results suggest about the stock's future performance potential and risk levels.

Example: "Perform a comprehensive analysis of 600298.SS using geometric Brownian motion modeling. Calculate drift and volatility parameters from 10 years of historical data, and use these to simulate 1,000 potential price paths for the next year. Report the 5th, 25th, 50th, 75th, and 95th percentile prices at the end of the simulation period. Include rolling volatility and drift analysis to identify trends in the stock's behavior. Compare the stock's parameters with its sector average and explain what the results suggest about the stock's future performance potential and risk levels."

Cross-Market Comparison Prompt

Compare the geometric Brownian motion parameters (drift and volatility) for the following stocks: [TICKER1], [TICKER2], [TICKER3]. Use 5 years of historical data and calculate both daily and annualized metrics. Create a risk-return plot using these parameters and explain which stock offers the most favorable risk-adjusted return profile based on the Sharpe ratio. Also identify which stock has shown the most stable parameters over time.

Example: "Compare the geometric Brownian motion parameters (drift and volatility) for the following stocks: AAPL, MSFT, 600298.SS. Use 5 years of historical data and calculate both daily and annualized metrics. Create a risk-return plot using these parameters and explain which stock offers the most favorable risk-adjusted return profile based on the Sharpe ratio. Also identify which stock has shown the most stable parameters over time."

Sector-Specific Analysis Prompt

Analyze the drift and volatility parameters for the top 5 companies in the [SPECIFIC_SECTOR] industry: [TICKER1], [TICKER2], [TICKER3], [TICKER4], [TICKER5]. Calculate these parameters using 3 years of historical data to reflect current market conditions. Explain how these companies compare in terms of expected returns and risk levels. Identify which company might be undervalued or overvalued based on its risk-return profile compared to sector peers.

Example: "Analyze the drift and volatility parameters for the top 5 companies in the food processing industry: 600298.SS, 002507.SZ, 603288.SS, 600887.SS, KHC. Calculate these parameters using 3 years of historical data to reflect current market conditions. Explain how these companies compare in terms of expected returns and risk levels. Identify which company might be undervalued or overvalued based on its risk-return profile compared to sector peers."

Portfolio Optimization Prompt

I'm considering a portfolio with the following allocation: [PERCENTAGE1]% in [TICKER1], [PERCENTAGE2]% in [TICKER2], [PERCENTAGE3]% in [TICKER3]. Calculate the geometric Brownian motion parameters for each stock using 5 years of data, then determine the expected return and volatility of the overall portfolio. Suggest an optimal reallocation of these three stocks to improve the Sharpe ratio while maintaining similar expected returns.

Example: "I'm considering a portfolio with the following allocation: 40% in SPY, 30% in AAPL, 30% in 600298.SS. Calculate the geometric Brownian motion parameters for each stock using 5 years of data, then determine the expected return and volatility of the overall portfolio. Suggest an optimal reallocation of these three stocks to improve the Sharpe ratio while maintaining similar expected returns."

Market Condition Impact Analysis Prompt

Analyze how different market conditions have affected the drift and volatility parameters of [TICKER_SYMBOL]. Calculate these parameters separately for the following periods: pre-COVID (2018-2019), COVID crash (Feb-Apr 2020), COVID recovery (May 2020-Dec 2021), and recent market (2022-present). Explain which market conditions produced the most favorable and unfavorable parameters for this stock, and what this suggests about how the stock might perform in different future market scenarios.

Example: "Analyze how different market conditions have affected the drift and volatility parameters of 600298.SS. Calculate these parameters separately for the following periods: pre-COVID (2018-2019), COVID crash (Feb-Apr 2020), COVID recovery (May 2020-Dec 2021), and recent market (2022-present). Explain which market conditions produced the most favorable and unfavorable parameters for this stock, and what this suggests about how the stock might perform in different future market scenarios."

Drift and Volatility Forecasting Prompt

Using [TICKER_SYMBOL]'s historical data, analyze how its drift and volatility parameters have evolved over time using 1-year rolling windows for the past 10 years. Identify any patterns or trends in these parameters and use them to forecast what the drift and volatility might be over the next 12 months. Explain the reliability of this forecast and what factors might cause the actual future parameters to deviate from your predictions.

Example: "Using 600298.SS's historical data, analyze how its drift and volatility parameters have evolved over time using 1-year rolling windows for the past 10 years. Identify any patterns or trends in these parameters and use them to forecast what the drift and volatility might be over the next 12 months. Explain the reliability of this forecast and what factors might cause the actual future parameters to deviate from your predictions."

Python Code Request Prompt

Write a Python script that uses the yfinance library to download 10 years of historical data for [TICKER_SYMBOL], calculates its geometric Brownian motion parameters (daily and annualized drift and volatility), simulates 1,000 potential price paths for the next year, and visualizes the results with appropriate charts. Include comments explaining each step of the analysis.

Example: "Write a Python script that uses the yfinance library to download 10 years of historical data for 600298.SS, calculates its geometric Brownian motion parameters (daily and annualized drift and volatility), simulates 1,000 potential price paths for the next year, and visualizes the results with appropriate charts. Include comments explaining each step of the analysis."

International Market Comparison Prompt

Compare the geometric Brownian motion parameters for similar companies from different markets: [US_TICKER] from the US market, [EUROPE_TICKER] from European markets, and [ASIA_TICKER] from Asian markets. Calculate parameters using 5 years of data, adjusted to a common currency (USD). Explain how different market characteristics might influence these parameters, and which market currently offers the best risk-adjusted return opportunities in this sector.

Example: "Compare the geometric Brownian motion parameters for similar companies from different markets: KHC from the US market, NESN.SW from European markets, and 600298.SS from Asian markets. Calculate parameters using 5 years of data, adjusted to a common currency (USD). Explain how different market characteristics might influence these parameters, and which market currently offers the best risk-adjusted return opportunities in this sector."

Advanced Portfolio Risk Assessment Prompt

For a portfolio consisting of [TICKER1], [TICKER2], and [TICKER3] with equal weights, calculate the Value at Risk (VaR) at 95% confidence level for a 1-month holding period using geometric Brownian motion parameters. First calculate the drift and volatility for each stock using 3 years of historical data, then simulate 10,000 potential portfolio value paths and determine the VaR. Compare this method with a historical simulation approach and explain which method provides more reliable risk estimates for this specific portfolio.

Example: "For a portfolio consisting of SPY, AAPL, and 600298.SS with equal weights, calculate the Value at Risk (VaR) at 95% confidence level for a 1-month holding period using geometric Brownian motion parameters. First calculate the drift and volatility for each stock using 3 years of historical data, then simulate 10,000 potential portfolio value paths and determine the VaR. Compare this method with a historical simulation approach and explain which method provides more reliable risk estimates for this specific portfolio."

These prompts should provide a comprehensive framework for analyzing various stocks using geometric Brownian motion parameters, similar to the analysis you requested for 600298.SS. You can adapt any of these prompts by replacing the ticker symbols with stocks you're interested in analyzing.