Question: how do we find portfolio standard deviation and portfolio return using excel? Let's say we have these 5 stocks : EMA FTT T SAP LB

how do we find portfolio standard deviation and portfolio return using excel? Let's say we have these 5 stocks :

EMA
FTT
T
SAP
LB

And their expected returns and standard deviations are respectively:

return stock std dev
0.0128271 0.0364705
0.0039463 0.0710933
0.0085713 0.0336428
0.0096578 0.0524817
0.0044607 0.0468692

Their covariance matrix is below as well:

0.017408481 -0.00036693 0.000495133 0.000415741 9.59576E-05
-0.00036693 0.00335971 0.000102459 0.000255565 0.000940235
0.000495133 0.000102459 0.00296511 0.000383832 0.000195049
0.000415741 0.000255565 0.000383832 0.033423186 -0.00021245
9.59576E-05 0.000940235 0.000195049 -0.00021245 0.006809115

The weights are all equally weighted (0.2 for all 5 stocks in 1 portfolio)

So with these knowledge, how do we find the portfolio return and portfolio standard deviation of this portfolio?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!