Financial Portfolio Management Stock Analysis Essay Help
Assignment
Pick three stocks of your choice (Select stocks listed in the USA exchange traded market), preferably from different industry groups. Go to the recommended websites or any other website that offers historical stock price data or to published information sources such as Yahoo Finance, or Google finance or any other reliable source of financial information. Extract weekly (for example, every Friday) closing share prices for the most recent 28 weeks. Also extract the values of the stock market index, (represented by S&P500 index or All Ordinaries in US), on a weekly basis over the same time period.
Required
Part 1 (25 marks)
(a) The rate of return in each week for each stock and for the stock market index for the 27 weekly periods. Calculate the discrete rate of return for each week. Calculate the arithmetic mean return and the geometric mean return of each stock for the entire period. Use only the discrete returns for your calculations and for the calculations in the questions that follow. (10 marks)
(b) The variance of returns for each stock and the index and the covariances of returns between each pair of stocks, the covariance between each stock and the stock market index, and the corresponding correlation coefficients. (5 marks)
(c) Compare your results in (a) and (b) for each stock and the stock market index and comment on the risk return characteristics and performance of each of your stocks and the index. Illustrate with tables/charts as appropriate. Comment on the results, relating to what you have learnt in this course. Relate the risk return pattern and the performance of the market index and your stocks to relevant events that took place during this period. Draw on economic, political, industry and company related events that took place over this period that may have impacted on the performance of your stocks and the market index. Give bibliographic references to the sources of your information. (15 marks)
