analysis risk

Portfolio Management and Risk Analysis

Using weekly price data of the 30 Dow Jones Industrial Average (DJIA) stocks for the past three years, construct the portfolios listed below.

Portfolios Structure: 6 portfolios of 5 stocks, 3 portfolios of 10 stocks, 2 portfolios of 15 stocks, and 1 portfolio of 30 stocks

  • For the portfolios, compute the returns, standard deviations and coefficient of risk variation.
  • Analyze the risk and return patterns and diversification benefits.
  • Based on the risk/return analysis, which portfolio selections are the most profitable?
  • How do the portfolios’ performances compare to the S&P 500’s?
  • What are the advantages and disadvantages of including international stocks in the portfolio?
  • If Mr. Smith chooses to include foreign stocks in the portfolio, how can he use derivatives to hedge against currency risk which can be present from international investing? Your well-written draft should meet the following requirements:

Your well-written paper should meet the following requirements:

  • Be two or three pages in length for the analysis and explanations
  • Be formatted according to the CSU-Global Guide to Writing and APA (Links to an external site.)
  • Include Excel spreadsheets with data, portfolios, and risk and return computations; these spreadsheets should be embedded in the Word document as an appendix after your analysis and explanations
  • Include a minimum of three credible references.
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