Collect the stock price data for any 2 companies

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You will need to collect the stock price data for any 2 companies of your choice and the S&P 400 index. Choose companies that are in different industries. Collect the end-of-month prices for the last 21 months of your chosen stocks and the S&P 400 and set them on the spreadsheet. Taking this raw data, compute the monthly returns for all (there should be 20 returns). Make sure that I am able to see the cell formulas for each computation.

Next, compute the mean rate of return and the standard deviation of returns for both your stocks and the stock market. Compute the beta value for each stock and plot the characteristic lines on 2 graphs. Compute the correlation coefficient for the 2 stocks. Plot the returns of your stocks against each other on a graph within the spreadsheet.

Next, assume that you construct a portfolio where you put equal money in each of your 2 stocks. Compute the 20 monthly rates of return for the portfolio and the standard deviation of returns of the portfolio. Finally, within the spreadsheet discuss in DETAIL your findings regarding risk/return of your portfolio as compared to the risk/return characteristics of the 2 individual stocks. These comments must be detailed with a complete analysis.

Reference no: EM132443170

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