Task Module $6$: Risk Measurement

Instructions: Identify a public company of your choice whose financial data is available on Yahoo Finance. Then identify two additional companies that are in the same industry $($peers or competitors$).$

These are the three companies selected:

$-$The Coca$-$Cola Company $($KO$)$

$-$PepsiCo, Inc. $($PEP$)$

$-$Nestle S$.$A$.($NSRGY$)$

Finally, answer the questions below and intersperse the calculated values, tables and graphs as appropriate.

$1.$Comment and compare the dispersion of the three companies and the portfolio based on the Range and Interquartile Range measures. Your response should include: interpretation of each measure and distinction between the two measures.

$2.$Comment and compare the dispersion of the three companies and the portfolio based on the Standard Deviation and Absolute Deviation measures. Your response should include: interpretation of each measure and distinction between the two measures.

$3.$Calculate, interpret and compare the coefficient of variation of the three companies and the portfolio. In this answer you should include the section of your R code that allows you to do the computation.

$4.$Comment and compare the dispersion of the three companies and the portfolio based on the SemiDeviation and Downside Deviation measures. Your response should include: interpretation of each measure and distinction between the two measures.

$5.$Select which of the measures calculated above best measures risk. Justify your selection.

$6.$Interpret the results of the graph that presents the $$Annualized Return$$ versus $$Annualized Risk$$ of the three companies.

$7.$Comment and compare the linear relationship between each of the three companies versus the portfolio based on the Covariance and Correlation measures. Your response should include: interpretation of each measure and distinction between the two measures.

$8.$Calculate and interpret the linear relationship between the companies using the correlation coefficient. Here you need to calculate the correlation between company pairs. For example: company $1$ vs company $2,$ company $1$ vs company $3,$ etc. In this answer you should include the section of your R code that allows you to do the computation.

$9.$Discuss and compare the correlation results in questions $8$ and $9$ above.