Computer Science Corporation will not be growing

A year ago, we first presented a share price (monthly closing price adjusted for splits and dividends) model for Computer Science Corporation (CSC). In this post, we revisit the previous model using all data available on April 24th.  Longer time series provide a better resolution between defining CPIs and higher model reliability.
For CSC, the defining indices are as a year and two years ago: the index of motor vehicle parts (MVP) and the index of sporting goods (SPO). The CPI components are leading by 0 and 5 months, respectively. Figure 1 depicts the evolution of both indices which provide the best fit model, i.e. the lowermost RMS residual error, between July 2008 and March 2011:  
CSC(t) = -3.83MVP(t-0) + 3.16SPO(t-5) +16.31(t-1990) – 137.20
where CSC(t) is the share price in US dollars, t is calendar time.
The predicted curve in Figure 2 is synchronized with the observed one. The residual error is of $3.28 for the period between July 2003 and March 2011.  Since the MVP index has been growing since 2002 and the SPO index has a slight negative trend, the share price will not be growing in the near future.
Figure 1. Evolution of the price indices MVP and SPO.
Figure 2. Observed and predicted CSC share prices.

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