Examine the historical performance

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Reference no: EM132708906

Risk Parity Individual Assignment

Wealth Management Online

I. Introduction and Objective of the Assignment
Examine the historical performance for a set of popular ETFs that represent traditional asset classes.

II. Assignment Questions
1. Please gather the following ETFs historical data (Frequency: Monthly) for the past 5 years:
a) SPY
b) QQQ
c) TLT
d) HYG
e) GLD

2. Compute the annual returns, the annualized standard deviation, and the monthly correlation of returns for the five assets.
a) Which assets performed the best and the worst?
b) Which assets had the most and least volatility or risk as measured by standard deviation?
c) Which one provided the best diversification benefits? Why?
d) Create a portfolio of the five assets. Compute the portfolio's annual returns and annualized standard deviation. Compare the portfolio results to the individual asset results.
Hints: The portfolio could be constructed by employing weights that are equally-weighted, capitalization-weighted, risk-weighted, etc. Use your creativity to create the "best" portfolio and defend your methodology.

III. Steps for completing the assignment.
Go to finance.yahoo.com to gather the historical data. Download data into Excel or Python to do your analysis. Compute monthly returns employing Adj Close prices.

IV. Tips
Answers will vary depending on the time period assigned.

V. Assignment Format
Please answer in two-pages, double-spaced essay format, the questions given in Part II.
Your submission must adhere to APA guidelines for formatting. Please see Course Documents in Blackboard for a link to the APA guidelines.
Please save your assignment with the name format illustrated below and upload your Word file in the submission link in Blackboard.

Your report should reflect excellence in content and presentation. It must be free of grammatical errors and clearly communicates your summary and opinions.

Attachment:- M5-Homework-Risk Parity.rar

Reference no: EM132708906

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