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Write a brief summary to clearly layout how much money the investor should invest in each stock in the optimal risk portfolio and what is
Write a brief summary to clearly layout how much money the investor should invest in each stock in the optimal risk portfolio and what is the risk of the portfolio. Compare to individual stocks, what is your observation about the portfolios return and risk. Did you observe the diversification benefit?
The Efficient Frontier | ||||||||||
Min Var | Optimum | |||||||||
Mean | 0.008107294 | 0.0085 | 0.009 | 0.0095 | 0.01 | 0.01476 | 0.015 | 0.016 | 0.017 | 0.018 |
SD | 0.029171713 | 0.029213389 | 0.029386438 | 0.029691621 | 0.030125 | 0.039361 | 0.040007384 | 0.042824 | 0.045812 | 0.04894 |
Slope | 0.277916271 | 0.290962473 | 0.306263726 | 0.319955589 | 0.331951 | 0.374989 | 0.374930784 | 0.373624 | 0.371084 | 0.367798 |
WMT | 0.173984148 | 0.158302846 | 0.138337267 | 0.118371657 | 0.098406 | -0.09167 | -0.101249819 | -0.14118 | -0.18112 | -0.22104 |
C | -0.05474485 | -0.05638651 | -0.058476429 | -0.06056635 | -0.06266 | -0.08255 | -0.083555428 | -0.08774 | -0.09192 | -0.09609 |
JNJ | 0.433453769 | 0.447038898 | 0.464335597 | 0.481632333 | 0.498929 | 0.663593 | 0.671895981 | 0.706489 | 0.74108 | 0.775676 |
IBM | 0.34128358 | 0.324706864 | 0.303600896 | 0.282494939 | 0.261389 | 0.060461 | 0.050329382 | 0.008117 | -0.03409 | -0.07631 |
BA | 0.106023351 | 0.126337901 | 0.152202669 | 0.178067416 | 0.203932 | 0.450164 | 0.462579885 | 0.514309 | 0.566041 | 0.617768 |
CAL | 0.01093908 | 0.010954708 | 0.011019599 | 0.011134039 | 0.011297 | 0.01476 | 0.01500234 | 0.016058 | 0.017179 | 0.018352 |
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