Refer Section $8-2$ of Chapter $8$ on Stand$-$Alone Risk.

Requirements: Analysis of Risk and Returns

You are given the following financial data on Microsoft $($MSFT$)$ and Tesla $($TSLA$)$ see attached table.

Calculate the two stand$-$alone risk measures, namely Standard Deviation and Coefficient of Variation $($CV$)$ for MSFT and TSLA $($reference Textbook $8-2$A$,$ Use Excel Function $$STDEV$.$S$$ for sample standard deviation and $$Average$$ for mean returns$).$

While Coefficient of variation $($CV$)$ illustrate risk per unit of return, another measure Sharpe Ratio is its inverse and illustrates return per unit of risk.

Contextualize your analysis by comparing for these two firms?

Explain, which measure intuitively indicates the $$biggest bang for your buck.$$

Continuing with the $\backslash$table$[[,$Returns in $\%,$Returns in $\%,$Returns in $\%,$Returns in $\%],[$Year$,$MSFT$,$TSLA,S&P$500,1-$ YR T$-$Bill$],[2012,5\mathrm{.}84,18\mathrm{.}59,13\mathrm{.}41,0\mathrm{.}16],[2013,44\mathrm{.}28,344\mathrm{.}14,29\mathrm{.}60,0\mathrm{.}13],[2014,27\mathrm{.}54,47\mathrm{.}85,11\mathrm{.}39,0\mathrm{.}25],[2015,22\mathrm{.}70,7\mathrm{.}91,-0\mathrm{.}73,0\mathrm{.}65],[2016,15\mathrm{.}07,-10\mathrm{.}97,9\mathrm{.}54,0\mathrm{.}81],[2017,40\mathrm{.}72,45\mathrm{.}70,19\mathrm{.}42,1\mathrm{.}73],[2018,20\mathrm{.}80,6\mathrm{.}89,-6\mathrm{.}24,2\mathrm{.}63],[2019,57\mathrm{.}03,25\mathrm{.}70,28\mathrm{.}88,1\mathrm{.}59],[2020,42\mathrm{.}53,743\mathrm{.}44,16\mathrm{.}26,0\mathrm{.}10],[2021,52\mathrm{.}48,49\mathrm{.}76,26\mathrm{.}89,0\mathrm{.}39],[2022,-28\mathrm{.}02,-65\mathrm{.}03,-19\mathrm{.}44,4\mathrm{.}73],[2023,16\mathrm{.}50,17\mathrm{.}50,7\mathrm{.}50,3\mathrm{.}52]]$data$,$ compute the correlation coefficient between MSFT and TSLA $($refer $8-3$B$),$ which measures tendency of two variables to move together. $($Use Fn$.$CORREL$$ in Excel$)$

What do your findings and analysis reveal?