Using ca.Finance.Yahoo.com, download the monthly prices over a 5-year period for 5 Canadian companies of your choice.
Question:
Using ca.Finance.Yahoo.com, download the monthly prices over a 5-year period for 5 Canadian companies of your choice. Calculate the monthly rates of return for each stock using "Adj. Close" (which includes dividends and stock splits).
a. Using the Excel functions for average (AVERAGE) and sample standard deviation (STDEV), calculate the average and the standard deviation of the returns for each of the firms.
b. Using Excel's correlation function (CORREL), find the correlations between each pair of 5 stocks. What are the highest and lowest correlations?
c. Pick 1 more stock that is in the same industry of one of your other stock. Find correlations between pairs of stocks in the same industry. Are the correlations higher than those you found in part (b)? Is this surprising?
StocksStocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Step by Step Answer:
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim