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

Investment, what is portfolio management and how can we calculate it?

what is portfolio management and how can we calculate it?

Portfolio Construction, Hello I was wondering how can I construct a portfol...

Hello I was wondering how can I construct a portfolio for analyzing momentum effect. The portfolio should include four stocks out of 40 with highest returns

Coursework, i need help to complete my coursework.

i need help to complete my coursework.

A-shares, These are the shares in mainland China-based companies that trade...

These are the shares in mainland China-based companies that trade on Chinese stock exchanges like Shanghai Stock Exchange and the Shenzhen Stock Exchange. A-shares are usually only

#ti, how to value convertible preference shares

how to value convertible preference shares

Calculate the optimal hedge ratio and capm-beta, Question 1 An investo...

Question 1 An investor would like to buy a futures contract on the ALCOA share. Today's price of the ALCOA share is $17. The maturity of the futures contract is in 6 months and

MIS, Comparison of knowledge management system with other systems

Comparison of knowledge management system with other systems

Baumol model, baumol model meaning advantages and features?

baumol model meaning advantages and features?

A-share, In the category of multi-class mutual funds, this is the class tha...

In the category of multi-class mutual funds, this is the class that is generally characterized by a loaded fee structure. Class A mutual fund units will normally have a front- or r

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