Hey Tutor,

I need help how to approach the following task:

I calculated that pre-covid correlation between Tesla and BitCoin was -0.07, while post-covid correlation was 0.70. In addition, Before covid Btc- mean: 8,42% and stdev: 0,228 Tesla: mean: 1,95% and stdev: 0,121, while after was Btc: mean 14,54% and stdev 0,220 Tesla: mean 22,98% and stdev 0,290

I need to construct portfolios consisting of Tesla and Bitcoin with weights on Tesla ranging from 0% to 100% in increments of 5%. You should get 21 pre-Covid portfolios and 21 post-Covid portfolios.

Then I need to do the following three things:

1. Calculate the expected returns and standard deviations of the resulting pre- and post-Covid portfolios, and in each case find the portfolio that has the minimum standard deviation. What are the mean and the standard deviations of these two portfolios? What do you conclude?

2. What are the maximum Sharpe ratios you could get before and after Covid? Recall that the Sharpe ratio of a portfolio is equal to its expected return divided by its standard deviation.

3. What happened to diversification in the post-Covid period?

Any help would be much appreciated.

Relevant data is accessible here: https://www.coursehero.com/file/109959448/Assingment-3-Dataxlsx/

Thank you for everything!