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

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

what is the random walk and the efficient market hypothesis?

Coursework, i need help to complete my coursework.

i need help to complete my coursework.

Calculate returns and correlations, Place the information described in this...

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 ret

Market Beta, The management of Nelson plc wish to estimate their firm’s equ...

The management of Nelson plc wish to estimate their firm’s equity beta. Nelson has had a stock market quotation for only two months and the financial management feels that it would

Quesiton, Ask questthe Wilshire 5000 market-value-weighted series increased...

Ask questthe Wilshire 5000 market-value-weighted series increased by 16 percent during a specified period, whereas a Wilshire 5000 equal-weighted series increased by 23 percent dur

S.D, WAHAT IS RISK ANALYSIS

WAHAT IS RISK ANALYSIS

American shares, A word used outside of the United States to explain the st...

A word used outside of the United States to explain the stock of publicly held companies that are originated and based in the United States. Investing in American shares can be par

Discuss procurement development model, Problem 1: Excel, a private firm...

Problem 1: Excel, a private firm, is in the process of purchasing an equipment representing an investment of about Rs10million. After considering all the offers from the pote

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