In this article, we will learn how to compute the risk and return of a portfolio of assets. Let’s start with a two asset portfolio. Portfolio Return Let’s say the returns from the two assets in the portfolio are R1 and R2. Also, assume the weights of the two assets in the portfo...
How to compute/create a tangent portfolio? Answer and Explanation: A tangent portfolio is one that that obtains the highest possible sharp ratio, which gives it the best relative performance in terms of risk. The way... Learn more about this topic: ...
Successful project portfolio management requires a realistic view of your capacity, an awareness of your budget, and a way to evaluate the priority of every project that you consider. You can begin evaluating your projects based on their cost. To do this, you must understand your direct and in...
The value of a stock portfolio varies from day to day. This is called volatility and it is a form of risk. Statisticians have worked out a way to measure the volatility called the “standard deviation,” which measures how spread out (or dispersed) the numbers are in a set of data. Th...
Another way of expressing this is that VaR is the lowest quantile of the potential losses that can occur within a given portfolio during a specified time period. The basic time period T and the confidence level (the quantile) q are the two major parameters that should be chosen in a way ...
Compute beta using a simple calculation when your portfolio contains securities from one marketplace, such as the S&P 500. According to the authors of "Financial Management" (2007), "Beta is established from past information on the assumption that it will remain fairly stable over time." In th...
The designer provides a comprehensive portfolio of algorithms, such asMulticlass Decision Forest,Recommendation systems,Neural Network Regression,Multiclass Neural Network, andK-Means Clustering. Each algorithm is designed to address a different type of machine learning problem. See thealgorithm and compone...
To compute drawdown, you’ll need to calculate the daily returns of the stock or portfolio. Next, calculate the cumulative returns, which represent the overall performance of the investment. Now, let’s compute the drawdown by finding the peak and trough values. ...
How Can I Find the Expected Return of a Portfolio? Some online brokers or certain financial advisors may be able to provide you with your portfolio's standard deviation at a glance, as it is automatically calculated via software in the background. To compute it by hand, you simply need to...
The first step to calculating the returns on your portfolio is to list each type of asset in a spreadsheet. Next to each asset, include the calculated ROI, dividends, cash flows, management fees, and any other figures relevant to the cost or returns of those assets. To perform these ...