Hi guys,I recently came across Benford's Law and thought I would...

Hi guys,

I recently came across Benford's Law and thought I would test it on the Brainchip shareprice. Results are interesting.
Benford's law:

Benford's law, also known as the Newcomb–Benford law, the law of anomalous numbers, or the first-digit law, is an observation that in many real-life sets of numerical data, the leading digit is likely to be small.

In other words, number 1 is the more likely leading digit in a given "real-life" distribution of numbers. I downloaded the share price of Brainchip for the last 5 years. In these 5 years the minimum close price I got was 0.03 while the maximum was 0.76 and we had every price in between. I processed the data to isolate the leading digit (non zero) For example for 0.03 the leading digit is 3. For 0.76 the leading digit is 7. After doing this for the 5-year time series, I got a big list of values ranging from 1 to 9. I then did a histogram with this values.

A Histogram represents how many occurrences (y-axis) of the event in the x-axis. In other words, how many days the share price closed with a leading 1, a leading 2, a leading 3 and so on. This is the plot:




Interestingly, as Benford's Law suggests, there is significantly more days where the BRN share price closed with a leading 1. Branchip did not trade at prices between 0.01 to 0.02 and has not traded at or above $1 just yet which means spent most of its time so far at these prices: 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 or 0.19. Interesting to see, how little BRN spent at the leading 7,8 and 9 (0.071 to 0.099 and 0.7 to 0.99)

What does this mean? Well it means nothing, it just means the BRN price did follow, until now, the Benford's Law as proven here.
What does this mean for the future? Will BRN go quickly to the $1 dollar, and then spend most of the future time between $1 to $1.99 to then fairly quickly (quickly in this time scale means a few years) jump to the next band of leading zeros (i.e.: $10+)?

Time will tell. I thought I'd share.