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I need guidance oh how to do these questions Download most recent 5-years of monthly stock price history for two large market capitalisation stocks from
I need guidance oh how to do these questions
- Download most recent 5-years of monthly stock price history for two large market capitalisation stocks from Yahoo Finance (click the Investing tab followed by the Historical Prices tab).Create a time series of monthly returns from this time series of monthly stock prices. Calculate the annualised mean return, standard deviation and correlation of the stocks.( I have downloaded the data, it is in the attached document)
- Use investment proportions for the two stocks ranging from zero to 100% using intervals of 10%. Tabulate and draw the investment opportunity set of the two stocks
- Calculate the weights on the minimum variance portfolio consisting of the two stocks, which we denote by stock X and stock Y
- Calculate the expected return and standard deviation of this minimum variance portfolio. Plot the two assets and the minimum variance portfolio on a diagram and plot the efficient frontier consisting of portfolios made up of these two assets.
- Discuss diversification referring to the expected return and standard deviation of the minimum-variance portfolio in your answer.
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