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    Alex Sharp's Portfolio

    Uploaded by

    FurqanTariq
    The document contains monthly return data for the S&P 500 index, Reynolds stock, Hasbro stock, and two hypothetical portfolios consisting of 99% investment in the S&P 500 and 1% investment in either Reynolds or Hasbro stock. Based on the average returns and standard deviations, Reynolds appears less risky than Hasbro despite having a higher average return. When calculating portfolio statistics assuming a 1% allocation to each stock, the portfolio with Reynolds has a lower risk and higher return. Beta and covariance calculations also indicate Reynolds is less impacted by market movements, making it the less risky and better investment choice for Alex Sharpe compared to Hasbro.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Alex Sharp's Portfolio

    Uploaded by

    FurqanTariq
    349 views6 pages
    The document contains monthly return data for the S&P 500 index, Reynolds stock, Hasbro stock, and two hypothetical portfolios consisting of 99% investment in the S&P 500 and 1% investment in either Reynolds or Hasbro stock. Based on the average returns and standard deviations, Reynolds appears less risky than Hasbro despite having a higher average return. When calculating portfolio statistics assuming a 1% allocation to each stock, the portfolio with Reynolds has a lower risk and higher return. Beta and covariance calculations also indicate Reynolds is less impacted by market movements, making it the less risky and better investment choice for Alex Sharpe compared to Hasbro.

    Original Description:

    Excel file for HBS case

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    The document contains monthly return data for the S&P 500 index, Reynolds stock, Hasbro stock, and two hypothetical portfolios consisting of 99% investment in the S&P 500 and 1% investment in either Reynolds or Hasbro stock. Based on the average returns and standard deviations, Reynolds appears less risky than Hasbro despite having a higher average return. When calculating portfolio statistics assuming a 1% allocation to each stock, the portfolio with Reynolds has a lower risk and higher return. Beta and covariance calculations also indicate Reynolds is less impacted by market movements, making it the less risky and better investment choice for Alex Sharpe compared to Hasbro.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    349 views6 pages

    Alex Sharp's Portfolio

    Uploaded by

    FurqanTariq
    The document contains monthly return data for the S&P 500 index, Reynolds stock, Hasbro stock, and two hypothetical portfolios consisting of 99% investment in the S&P 500 and 1% investment in either Reynolds or Hasbro stock. Based on the average returns and standard deviations, Reynolds appears less risky than Hasbro despite having a higher average return. When calculating portfolio statistics assuming a 1% allocation to each stock, the portfolio with Reynolds has a lower risk and higher return. Beta and covariance calculations also indicate Reynolds is less impacted by market movements, making it the less risky and better investment choice for Alex Sharpe compared to Hasbro.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    Date S&P 500 REYNOLDS HASBRO PORTFOLIO S&P, REYNOLDS

    2-Jan -1.70% 6.13% 1.66% -1.62%


    2-Feb -2.31% 9.87% -13.27% -2.19%
    2-Mar 4.37% -1.37% 10.55% 4.31%
    2-Apr -5.06% 6.87% 1.01% -4.94%
    2-May -1.19% 2.17% -4.26% -1.16%
    2-Jun -7.15% -23.97% -11.37% -7.32%
    2-Jul -8.23% 1.64% -9.66% -8.13%
    2-Aug 0.64% 7.71% 7.35% 0.71%
    2-Sep -10.14% -31.48% -15.36% -10.35%
    2-Oct 7.35% 0.57% -8.18% 7.28%
    2-Nov 5.96% -4.81% 25.44% 5.85%
    2-Dec -5.50% 9.09% -9.91% -5.35%
    3-Jan -2.46% 0.59% 3.90% -2.43%
    3-Feb -1.72% -5.78% 0.92% -1.76%
    3-Mar 0.89% -19.17% 14.70% 0.69%
    3-Apr 8.12% -12.68% 15.19% 7.91%
    3-May 6.18% 21.02% 0.06% 6.33%
    3-Jun 1.48% 9.15% 9.24% 1.56%
    3-Jul 2.18% -4.54% 7.78% 2.11%
    3-Aug 2.34% -3.86% -1.86% 2.28%
    3-Sep -1.06% 15.78% 0.97% -0.89%
    3-Oct 5.89% 21.47% 16.70% 6.05%
    3-Nov 1.51% 14.93% 1.42% 1.64%
    3-Dec 4.39% 5.34% -3.75% 4.40%
    4-Jan 2.20% 1.56% -7.19% 2.19%
    4-Feb 1.40% 4.52% 10.73% 1.43%
    4-Mar -1.20% -1.99% -0.55% -1.21%
    4-Apr -2.56% 7.06% -13.15% -2.46%
    4-May 1.24% -13.23% 4.08% 1.10%
    4-Jun 2.00% 20.27% -3.36% 2.18%
    4-Jul -3.88% 6.45% -4.37% -3.78%
    4-Aug 0.11% 4.93% 1.98% 0.16%
    4-Sep 1.91% -9.88% 1.46% 1.79%
    4-Oct 1.66% 1.21% -5.90% 1.66%
    4-Nov 4.43% 9.83% 7.57% 4.48%
    4-Dec 3.34% 3.93% 1.84% 3.35%
    5-Jan -2.74% 2.32% 1.14% -2.69%
    5-Feb 2.09% 1.90% 7.76% 2.09%
    5-Mar -1.86% -1.66% -3.17% -1.86%
    5-Apr -2.66% -3.25% -7.48% -2.67%
    5-May 3.59% 6.34% 6.66% 3.62%
    5-Jun 0.99% -4.96% 3.02% 0.93%
    5-Jul 4.22% 5.72% 5.53% 4.24%
    5-Aug -0.78% 0.76% -5.65% -0.76%
    5-Sep 0.93% -1.10% -5.07% 0.91%
    5-Oct -2.19% 2.38% -4.12% -2.14%
    5-Nov 3.82% 4.73% 8.39% 3.83%
    5-Dec 0.19% 7.09% -1.18% 0.26%
    6-Jan 3.90% 6.08% 5.05% 3.92%
    6-Feb -0.36% 4.96% -4.29% -0.31%
    6-Mar 1.76% -0.61% 3.99% 1.74%
    6-Apr 1.15% 3.93% -6.59% 1.18%
    6-May -3.30% 0.26% -5.94% -3.26%
    6-Jun -0.19% 4.88% -2.32% -0.14%
    6-Jul -0.28% 9.96% 3.26% -0.18%
    6-Aug 2.30% 2.65% 8.56% 2.30%
    6-Sep 1.81% -4.76% 12.07% 1.74%
    6-Oct 3.60% 1.92% 13.93% 3.58%
    6-Nov 2.13% 1.71% 3.20% 2.13%
    6-Dec 0.91% 1.91% 1.87% 0.92%
    PORTFOLIO S&P, HASBRO
    -1.67%
    -2.42%
    4.43%
    -5.00%
    -1.22%
    -7.19%
    -8.24%
    0.71%
    -10.19%
    7.19%
    6.15%
    -5.54%
    -2.40%
    -1.69%
    1.03%
    8.19%
    6.12%
    1.56%
    2.24%
    2.30%
    -1.04%
    6.00%
    1.51%
    4.31%
    2.11%
    1.49%
    -1.19%
    -2.67%
    1.27%
    1.95%
    -3.88%
    0.13%
    1.91%
    1.58%
    4.46%
    3.33%
    -2.70%
    2.15%
    -1.87%
    -2.71%
    3.62%
    1.01%
    4.23%
    -0.83%
    0.87%
    -2.21%
    3.87%
    0.18%
    3.91%
    -0.40%
    1.78%
    1.07%
    -3.33%
    -0.21%
    -0.24%
    2.36%
    1.91%
    3.70%
    2.14%
    0.92%
    Alex Sharpe Case Study Submitted by 19010025

    S&P Reynolds Hasbro


    From only the R_avg and stdev it seem
    R_Avg 6.89% 22.50% 14.21% riskier with higher stdev but has highe
    Stdev 12.48% 32.45% 28.11% return.
    However, assuming that 1% is invested
    R_PORTFOLIO_AVG 7.05% 6.97% them, the portfolio risk is lower in case
    Reynolds as compared to Hasbro and t
    R_PORTFOLIO_STDEV 12.51% 12.60% return is higher with Reynolds in portfo
    Assuming 99% investment in S&P and 1% investment in Reynolds or Hasbro

    Beta with Reynolds is lower than 1 me


    S&P 500, REYNOLDS S&P 500, HASBRO greatly affected by market change. Has
    COVARIANCE 0.0009385487 0.0018111143 as its beta is greater than 1 which mea
    market rises it will rise rapidly but conv
    BETA 0.7235003192 1.396136128 market drops it will drop rapidly too.

    REQUIRED RATE OF RETURN


    Assume market risk premium 6.00%
    Risk free rate 0.89% Again shows Hasbro is riskier and henc
    S&P 500, REYNOLDS 5.23% rate of return is higher
    S&P 500, HASBRO 9.27%

    REYNOLDS IS LESS RISKIER INVESTMENT. ALEX SHOULD PICK IT


    R_avg and stdev it seems Reynolds is
    gher stdev but has higher rate of

    uming that 1% is invested in either of


    tfolio risk is lower in case with
    ompared to Hasbro and the rate of
    er with Reynolds in portfolio

    nolds is lower than 1 meaning its not


    ed by market change. Hasbro is riskier
    reater than 1 which means that when
    will rise rapidly but conversly as
    it will drop rapidly too.

    Hasbro is riskier and hence the required


    is higher

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