Excel statistical software is very useful for examining and exploring data sets for real life uses and tests of assumptions and ideas.  This article summarizes these uses and how you can decide on the proper package.

An interesting usage of Excel statistical software is in forecasting the results of stock exchange orders. Optimisation of limit and stop orders is a crucial requirement.  For example, where should I enter my stop to ensure the lowest losing trades without getting stopped out by common market interference?  If I enter a limit order 2 pips clear of the prior closing price, what’s the probability that my order is going to be hit?  If it isn’t executed, what’s the likely gain I might lose?  This is an abundant topic of inquiry.

Calculating and applying correlation matrices is an additional purpose in which Excel statistical software is great. A professional statistics addin can calculate correlation grids faster and better than the standard Excel CORREL() function.  Because correlations are employed in almost all portfolio risk and performance analyses, this is an area where an off the shelf application can be extremely useful.

Short-term predictions are one more rich area of statistical research.  You may be predicting virus growth percentages in geographical populations, the probability of a shipping accident over the following month, or the likelihood that credit spread prices will be plus or minus 100 percent in the next day.  With Excel you ony have to dump your data into the spreadsheet, pick the appropriate predictive model, run the analysis, and analyze the output like histograms, Z score, etc.

Other uses include efficient portfolio analysis, the frequency of cash versus credit card transactions, drug use for teens, and purchasing effects of PPI changes.  These are interesting topics of study where Excel add-ins can be utilized to obtain results.  For these various uses, it is good to employ Excel statistical software.