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?
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