Constructing a 2-security Portfolio Steps for a company selected from Investing.com - Stock Market Quotes & Financial News

1- Calculate the expected return and standard deviation for each stock

2- Calculate the covariance and correlation coefficient between the stocks

3- Choose the best portfolio P based on the concept of diversification.

4- Calculate the expected return and standard deviation for this portfolio using 50%-50% weights.

5- Find the weights of the portfolio (Pmin var) that has the minimum variance, using the equation.

6- Calculate the expected return and standard deviation for the minimum-variance portfolio

Prepare to answer a question about your project -

Explain what you know about the businesses you are going to invest in. (refer to their line of business) -

- Explain what you know about the businesses you are going to invest in. (refer to their line of business) - Interpret a high/low correlation between the returns of any two stocks - What are the other steps you should be taking to form a good investment strategy? e.g. Deciding on your objectives deciding first on your risk tolerance - deciding on your asset allocation ... constructing a broader portfolio following a disciplined investment approach.. etc.