1. Risk Analysis by the Numbers Atlantic Tropical Cyclones Jonathon Carrasco University of Houston Bauer College of Business Department of Finance

2. Questions to Address How to merge data from various sources for a more complete picture of “what is going on” How to make a little data say a lot – Graphs – Statistics How to interpret all of the above

3. Sources Willis Energy Loss Database@@ Number of Incidence Actual Losses US$ Indexed Losses US$ The National Hurricane Center's Tropical Cyclone Reports@@ Number of Tropical Storms Tropical Storm Classification Tropical Storm Risk@@ Predicted Named Storms Predicted Hurricanes Predicted Intense Hurricanes

6. Construction of Box Plot Middle Line - Median Value The box is made up of the 25 th and 75 th percentile. This is also referred to as the “inner quartile range” Data points that are more than 1.5 times away from the “inner quartile range” are considered outliers. “Whiskers” are assigned to the lowest non-outlier Dots are assigned to values that lie beyond the whiskers. Open dots indicate “mild outliers” (1.5< X< 3). Closed dots indicate “extreme outliers” (3 < X) Flickr: “Boxplot” (waynew47)

7. Visualize as a Bell Curve http://en.wikipedia.org/wiki/Box_plot

8. Hurricanes

9. Tropical Storms

10. Storm Classification Hurricane Tropical Storm Tropical Depression Subtropical Storm Subtropical Depression

12. Take a look at the Data Year Subtropical Depression Subtropical Storm Tropical Depression Tropical Storm Hurricane 199900448 200001468 200100269 200200284 200300597 200401159 20051121215 200600055 200701286

13. Create an Intensity Score Year Subtropical Depression Subtropical Storm Tropical Depression Tropical Storm Hurricane Intensity Score 19990044868 20000146878 20010026975 20020028458 20030059786 20040115970 20051121215132 20060005545 20070128670 Storm ClassificationIntensity Contribution Subtropical Depression1 Subtropical Storm2 Tropical Depression3 Tropical Storm4 Hurricane5

15. Intensity Score

17. Total Losses

19. Total Losses (Log10)

20. Regression Analysis Drawing a line through a scatterplot Minimizes the least- squares error y = a + Bx + e http://en.wikipedia.org/wiki/Regression_analysis

21. Statistical Tests t-test – How far away from the mean divided by the estimated variance (noise) in the sample F-test http://en.wikipedia.org/wiki/T-distribution http://en.wikipedia.org/wiki/F-distribution

22. Breakdown of a regression

23. Intensity Analysis

24. Predicted Tropical Storms