3
$\begingroup$

Is there some calculation method which normalizes data (numbers) if I don't have minimum and maximum edge?

Only one I know is: y = (x - min-x) / (max-x - min-x). But as I said I don't have an edge so this is not usable in my case.

For example:

I have USDJPY (105.25) price and price of JPN index (17408.45). And these two prices are totally different. And what I want to do is normalize these prices and compare them in the chart for example...

Any ideas?

$\endgroup$
6
  • $\begingroup$ Why do you feel you need to normalize the prices at all? What kind of comparisons do you really want to do? $\endgroup$
    – whuber
    Commented Jan 2, 2015 at 21:12
  • $\begingroup$ I want to get these two prices into one chart as two lines and look for the crosses for example... But in their current format it is not possible (scale from 0 to 17408.45 where USDJPY would look like an horizontal line). I could define min and max in fact but in my case it is not accurate... $\endgroup$
    – brolinko
    Commented Jan 2, 2015 at 21:18
  • $\begingroup$ If all you want to do is fit the data into a chart, then why don't their minima and maxima do it? In what way are they "inaccurate"? $\endgroup$
    – whuber
    Commented Jan 2, 2015 at 21:28
  • $\begingroup$ How about subtracting the mean and dividing by the standard deviation? $\endgroup$ Commented Jan 2, 2015 at 21:37
  • $\begingroup$ You seem to be using the word "edge" in a way that's not quite clear to me. What does "edge" mean in this context? $\endgroup$
    – Glen_b
    Commented Jan 4, 2015 at 1:27

2 Answers 2

0
$\begingroup$

How about (x- mean(x)) / standard deviation (x)

This gives you variable with mean 0 and variance 1.

$\endgroup$
0
3
$\begingroup$

The exchange rates are typically stationary, while indices are not. This comparison would be strange to start with.

It is more meaningful to compare the index annualized growth rate with the exchange rate, both of which are more stationary. Once you get annualized growth rates in percentages add 100, and you'll get the numbers like 102-105, which is comparable to USDJPY Crncy in scale.

Also, you probably mean NKY Index and not JPN Index, because the latter is about 181 these days.

Example: enter image description here

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.