Calculate returns and correlations, Portfolio Management

Assignment Help:

Place the information described in this stage in the worksheet titled "Analysis".

Step 1) Calculate the arithmetic average periodic return and standard deviation of periodic returns for all four stocks, the S&P 500, your two "combined asset portfolios, and the T-bill.  Use the "average" function for the arithmetic average and the "stdev" function for standard deviation. Also compute the geometric average as

                        =((endingcumul ret/beginning cumul ret)^(1/# of returns)) - 1

Step 2) Calculate the arithmetic averages and standard deviations separately for the sub-periods listed in the 2nd table in the Analysis worksheet.

Step 3)Build a table of correlations similar to the table below for the correlations among ALL of the INDIVIDUAL stock returns and the S&P 500 returns (the following table is an example for several stocks; however, the data is old so don't expect to get these answers).  IGNORE YOUR 2 "COMBINED-ASSET" PORTFOLIO FOR THIS STEP.

173_Calculate Returns and Correlations.png

The formula for calculating the correlations is the "Correl" function.  To use this function, open the function box and then choose the correlation function.  When the dialog box opens, select the data in pairs with the asset appearing in the left column being the "y's" and the assets appearing across the top being your "x's."  Alternatively, just type "=correl(" and follow Excel's prompts. You will need to do this for each asset pair; however, you do not need to complete the top half since it is a mirror image of the bottom half.  Use the available data for each pair of stocks.


Related Discussions:- Calculate returns and correlations

Hatch system of stock investment, b) Mr. Castro uses a 20% hatch system of ...

b) Mr. Castro uses a 20% hatch system of timing when to invest in a stock market. In a given, the top of a given share was Shs.150/= and its bottom was Shs.90. During the year the

Financial, erd with entity tables and dfd

erd with entity tables and dfd

Boumal-Tobin Demand for Money, The Baumol-Tobin model is a model that expl...

The Baumol-Tobin model is a model that explains money holdings in terms of a transactions demand. That is, money is needed as a medium of exchange to purchase goods and services. T

Portfolio, Por tfolio A portfolio is a combination of various priv...

Por tfolio A portfolio is a combination of various privacies or assets. A portfolio may consist of combinations of stocks, bonds, real estate, or any other asset held by a

Brokers, Kinds of Brokers and assistants

Kinds of Brokers and assistants

Investment portfolio analysis, Having investment in both Proctor and Gamble...

Having investment in both Proctor and Gamble (PG), and Research in Motion (RIMM) from September 2010 upto now. Write a four-page analysis. To compare their performance to that of t

Market Efficiency, what is the random walk and the efficient market hypothe...

what is the random walk and the efficient market hypothesis?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd