After successful completion of BUSAD 5040, you decided to manage your own investment portfolio. Assume you already hold a well-diversified stock portfolio that has a portfolio beta of 1. You are looking to add another stock to that already well-diversified portfolio. Your only objective is to add a stock that results in the best diversification. In other words, the stock that you add will reduce the risk of your portfolio. The price information is contained in an excel spreadsheet on Canvas called Problem 7. What company do you recommend? You must support your answer.

Date	Stock 1	Stock 2	Stock 3	Stock 4	S&P 500
1/1/2016	43.53368	2.20000	35.293396	91.839996	1940.24
2/1/2016	44.739399	2.14000	33.053894	93.410004	1932.23
3/1/2016	47.693806	2.85000	35.232162	102.230003	2059.74
4/1/2016	44.924595	3.55000	37.282669	90.029999	2065.3
5/1/2016	45.363163	4.57000	36.813488	102.57	2096.95
6/1/2016	49.765793	5.14000	38.099251	91.480003	2098.86
7/1/2016	49.382572	6.86000	39.620064	91.25	2173.6
8/1/2016	47.10844	7.40000	38.204742	97.449997	2170.95
9/1/2016	46.793365	6.91000	38.317265	98.550003	2168.27
10/1/2016	43.300522	7.23000	35.54541	124.870003	2126.15
11/1/2016	45.432766	8.91000	33.573139	117	2198.81
12/1/2016	48.601215	11.34000	33.966995	123.800003	2238.83
1/1/2017	44.622437	10.37000	35.333229	140.710007	2278.87
2/1/2017	45.669624	14.46000	37.283703	142.130005	2363.64
3/1/2017	44.85984	14.55000	38.422054	147.809998	2362.72
4/1/2017	42.246471	13.30000	37.273769	152.199997	2384.2
5/1/2017	43.429863	11.19000	40.308529	163.070007	2411.8
6/1/2017	41.58614	12.48000	39.761932	149.410004	2423.41
7/1/2017	45.068722	13.61000	37.364418	181.660004	2470.3
8/1/2017	45.253632	13.02000	37.096996	174.710007	2471.65
9/1/2017	46.687557	12.75000	37.911282	181.350006	2519.36
10/1/2017	45.159286	10.99000	34.017441	196.429993	2575.26
11/1/2017	48.584221	10.89000	32.738167	195.509995	2584.84
12/1/2017	50.531792	10.28000	33.594536	191.960007	2673.61