Portfolio management

By : Choufani abderrahmane and ed-raouy radwan.

2018-2019
 Average return over last 60 months
3.00% 2.80%

2.50%

2.00% 1.89%

1.50% 1.35% 1.43%

1.10%
1.00%
0.63%
0.50%

0.00%
Apple Amazon Jp morgan Berkshire Mcdonald's S&P 500
chase hathaway
 Average return over last 60 months

2.50%
2.24%
2.07%
2.00%

1.50% 1.45%

1.04%
1.00%
0.73%
0.63%
0.50%

0.00%
Nike Facebook Bank of Coca cola Microsoft S&P 500
america
Analysis Beta:
stock/indice Beta
s&P 500 1
Apple 1,14
Amazon 1,59
Jp morgan chase 1,15
Berkshire hathaway 0,86
Mcdonald's 0,51

 A beta of stock’ companies Apple , Amazon and jp morgan chase is greater than
1.00 beta of index S&P 500 that indicates the security's price is theoretically
more volatile than the market. And also indicates that adding the stock to a
portfolio will increase the portfolio’s risk, but also increase its expected return.

 A beta of Berkshire Hathaway and McDonald's is less than 1.00 means that
the security is theoretically less volatile than the market which means the
portfolio is less risky with the stock included than without it. and utility stocks
often have low betas because they tend to move more slowly than market
averages.
Analysis Beta:
stock/indice Beta
s&P 500 1
Bank of america 1,40
Microsoft 1,24
Nike -0,27
Facebook 0,69
Coca cola 0,57

 The beta of stock Microsoft and bank of America is greater than 1.00 beta of
S&P500 that indicates the security’s price is theoretically more volatile than the
market adding stock to a portfolio will increase the portfolio’s risk

 The beta of coca nike and Facebook is less than 1.00 means that the security is
theoretically less volatile than the market wish means the portfolio is less risky
with the stock include than without it and utility stocks often have low beats
because they tend move more slowly than the market averages
Analysis correlation :
Name S&P 500 return
S&P 500 1,000
APPLE 0,495
Amazon 0,589
Jp morgan chase 0,635
Berkshire hathaway 0,697
Mcdonald's 0,399

 There is clearly a positive relationship between stock’s (Apple , amazon ,

Jp morgan chase and Berkshire Hathaway) and S&P 500 , that's mean
they have a strong positive correlation of return with the index over the last
5 years.

 the indicator shows us that the correlation of return between securities of

macdonald’s and S&P 500 are less correlated over the last 5 years
Analysis correlation :
Name Standard Deviation
S&P 500 1
Nike -0,05
Facebook 0,35
Bank of America 0,58
Coca cola 0,47
Microsoft 0,64
Correlation, in the finance and investment industries, is a statistic that
measures the degree to which two securities move in relation to each other
and must fall between -1 and 1.

 There is clearly a positive relationship between stock’s (Microsoft,

bank of America and coca cola that means they move in relation to
each other when the Standard and Poor's make gain these 3
companies do the same

 The Nike and Standard and Poor's does not move in the same
direction when on make gain the other make lose
 Analysis Standard Deviation:
Name Standard Deviation
APPLE 7,24%
Amazon 8,46%
Jp morgan chase 5,66%
Berkshire hathaway 3,85%
Mcdonald's 4,03%

 The standard deviation of returns for apple (7,24%) and Amazon (8,46%) is A high
standard deviation in portfolio that the portfolio risk is high and return is more volatile
in nature and as such unstable as well.

 For the rest ( Jp morgan chase 5.66, Berkshire Hathaway 3.85 and McDonald's 4.03)
with low Standard Deviation implies less volatility and more stability in the returns of
stock’s
Analysis Standard Deviation:
Name Standard Deviation
Nike 14,77%
Facebook 6,15%
Bank of America 7,49%
Microsoft 6,03%
Coca cola 3,80%

A measure of the dispersion of a set of data from its mean. In finance, standard
deviation is applied to the annual rate of return of an investment to measure the
investment's volatility

 For example, the Nike company: has 14.76%

the investor now knows that the returns fluctuate by approximately 14% month-
over-month. The information can be used to modify the portfolio to better the
investor’s attitude towards risk.