RHI STOCK ANALYSIS | ||||||||||
P | R | P*R | D=(R-23.8) | E=D^2 | F=E*P | |||||
State | Probability | Return | Probabilty *Return | Deviation from Mean | Deviation Squared | Deviation Squared*Probability | ||||
Boom | 0.3 | 38 | 11.4 | 14.2 | 201.64 | 60.492 | ||||
Neutral | 0.5 | 20 | 10 | -3.8 | 14.44 | 7.22 | ||||
Reccession | 0.2 | 12 | 2.4 | -11.8 | 139.24 | 27.848 | ||||
SUM | 23.80 | SUM | 95.56 | |||||||
Mean Return | 23.8 | |||||||||
Variance of Return | 95.56 | |||||||||
Standard Deviation | 9.78 | (Square Root (95.56) | ||||||||
a | Expected Return of RHI | 23.80% | ||||||||
Standard Deviation of RHI | 9.78% | |||||||||
MLC STOCK ANALYSIS | ||||||||||
P | R | P*R | D=(R-18.7) | E=D^2 | F=E*P | |||||
State | Probability | Return | Probabilty *Return | Deviation from Mean | Deviation Squared | Deviation Squared*Probability | ||||
Boom | 0.3 | 35 | 10.5 | 16.3 | 265.69 | 79.707 | ||||
Neutral | 0.5 | 14 | 7 | -4.7 | 22.09 | 11.045 | ||||
Reccession | 0.2 | 6 | 1.2 | -12.7 | 161.29 | 32.258 | ||||
SUM | 18.70 | SUM | 123.01 | |||||||
Mean Return | 18.70 | |||||||||
Variance of Return | 123.01 | |||||||||
Standard Deviation | 11.09 | (Square Root (123.01) | ||||||||
b | Expected Return of MLC | 18.70% | ||||||||
Standard Deviation of MLC | 11.09% | |||||||||
COVARIANCE BETWEEN RETURN OF RHI and MLC | ||||||||||
P | D1 | D2 | P*D1*D2 | |||||||
State | Probability | Deviation from Mean of RHI | Deviation from Mean of MLC | Deviation RHI*DeviationMLC*Probability | ||||||
Boom | 0.3 | 14.2 | 16.3 | 69.438 | ||||||
Neutral | 0.5 | -3.8 | -4.7 | 8.93 | ||||||
Reccession | 0.2 | -11.8 | -12.7 | 29.972 | ||||||
SUM | 108.34 | |||||||||
Covariance (RHI,MLC) | 108.34 | |||||||||
c | Weight of stock RHI | 0.56 | (14000/25000) | |||||||
Weight of stock MLC | 0.44 | (1-0.56) | ||||||||
Expected Portfolio Return : | ||||||||||
(Weight of RHI*Mean Return of RHI)+(Weight of MLC*Mean Return of MLC) | ||||||||||
Expected Portfolio Return : | 21.56% | (0.56*23.8)+(0.44*18.7) | ||||||||
Standard Deviation Of Portfolio: | ||||||||||
Vp=Portfolio Variance =(w1^2)*(S1^2)+(w2^2)*(S2^2)+2*w1*w2*Covariance(1,2) | ||||||||||
w1=weight of stock 1= | 0.56 | |||||||||
w2=weight of stock 2= | 0.44 | |||||||||
S1=Standard Deviation of Stock1= | 9.78 | |||||||||
S2=Standard Deviation of Stock2= | 11.09 | |||||||||
Covariance(1,2)= | 108.34 | |||||||||
Portfolio Variance= | 107.172304 | |||||||||
Portfolio Standard Deviation | 10.35% | (Square Root of 107.17) | ||||||||
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