finance

Final Project Using Stock Data Collected During the Semester

1.

Be sure your data is listed so that each column is a different stock and the rows contain the

prices for each day of your collection.

Stock 1

Stock 2

Stock 3

…

Stock 10

1/1/17

1/2/17

1/32/174

HPR1

HPR2

HPR3

HPR1

Volatility1

Volatility2

Volatility3

Volatility10

Investment

$10,000

$10,000

$10,000

$10,000

2.

Compute the holding period return for each. Here is a website that will help:

http://financetrain.com/how

-

to

-

calculate

-

the

-

holding

-

period

-

returns/

3.

Compute the annualized volatility for each of your stocks:

https://www.fool.com/knowledge

-

center/how

-

to

-

calculate

-

annualized

-

volatility.aspx

4.

Compute the return on an equally weighted portfolio of your ten stock.

https://www.boundless.com/finance/textbooks/boundless

-

finance

-

textbook/introduction

-

to

-

risk

-

and

-

re

turn

-

8/implications

-

across

-

portfolios

-

80/calculating

-

expected

-

portfolio

-

returns

-

349

-

3894/

5.

Construct a correlation matrix for the ten stocks in your spreadsheet.

www.ruf.ric

e.edu/~admn543/

Correlation

%20matrix%20steps.doc

6.

Using the correlation matrix, construct 6 portfolios of two stocks each. Find 2 portfolios of

positively correlated stocks, 2 portfolios of negatively correlated stocks and 2 portfolios of

stocks that have

correlations that are as close to zero as you have.

7.

Compare the portfolio returns you get to the individual returns of the stock that comprise them.

8.

Lastly, create portfolio of 5 stocks of your own choosing and we

ight. Compute the daily value of

that po

rtfolio, then use this column to determine the holding period return and volatility of your

self

-

constructed portfolio.

Final Project Using Stock Data Collected During the Semester

1. Be sure your data is listed so that each column is a different stock and the rows contain the

prices for each day of your collection.

Stock 1 Stock 2 Stock 3… Stock 10

1/1/17

1/2/17

1/32/174

HPR1 HPR2 HPR3 HPR1

Volatility1 Volatility2 Volatility3 Volatility10

Investment $10,000 $10,000 $10,000 $10,000

2. Compute the holding period return for each. Here is a website that will help:

http://financetrain.com/how-to-calculate-the-holding-period-returns/

3. Compute the annualized volatility for each of your stocks:

https://www.fool.com/knowledge-center/how-to-calculate-annualized-volatility.aspx

4. Compute the return on an equally weighted portfolio of your ten stock.

https://www.boundless.com/finance/textbooks/boundless-finance-textbook/introduction-to-

risk-and-return-8/implications-across-portfolios-80/calculating-expected-portfolio-returns-349-

3894/

5. Construct a correlation matrix for the ten stocks in your spreadsheet.

www.ruf.rice.edu/~admn543/Correlation%20matrix%20steps.doc

6. Using the correlation matrix, construct 6 portfolios of two stocks each. Find 2 portfolios of

positively correlated stocks, 2 portfolios of negatively correlated stocks and 2 portfolios of

stocks that have correlations that are as close to zero as you have.

7. Compare the portfolio returns you get to the individual returns of the stock that comprise them.

8. Lastly, create portfolio of 5 stocks of your own choosing and weight. Compute the daily value of

that portfolio, then use this column to determine the holding period return and volatility of your

self-constructed portfolio.