Sailing in two boats: Dependent & Independent Variables!

[ZacParticipant]

I have been reading around and listening people say choosing the variable type is difficult when you are formulating your hypothesis. And, in the obvious sense, for implementing statistical tests, you need to fix a dependent and independent variable. All through my reading, my understanding goes in-line with the fact that the task is complicated and confusing, but none could precisely clarify my doubt.

So, with the hope of some clarity, I’m jotting it down here:
My study targets to test the effect of stock prices on revenue generation of a firm. With your first reading you’d say dependent variable would be the revenue of the firm while the stock prices would be the independent one.

Now, the point confusing me is that how can we out rightly mark stock prices as independent since the prices are actually a reflection of a firm’s profitability?

Can anyone suggest me if I should change my research objective or some other way out for this?

[JacksonParticipant]

I would add here that the core essence of study look flawed. In general, stock price of a firm has nothing to do with the revenue it generates. Unless, you have some literature proving otherwise.

However, if there is an effect of stock price on the revenue, this would need to be classified as exploratory study without undertaking the hypothesis route.

[Author]

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