Daily Stock Return Analysis a. Data Download and Preparation (2p) Download historical stock data for Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and IBM from Yahoo Finance for the past 5 years, covering the period from September 1, 2019, to September 1, 2024. Import the data into a spreadsheet and ensure the dataset includes the daily adjusted closing prices for each stock. b. Daily Returns Calculation (3p) Compute the daily returns for each stock using the formula: Daily Return = (Current Price /Prior Period Price) – 1 Express the daily returns as percentages. c. Descriptive Statistics (10p) For each stock, calculate fallowing statistics for daily returns: Mean Daily Return: The average daily return. Standard Deviation of Daily Returns: A measure of the volatility of daily returns. d. Histograms (5p) Create histograms for the daily returns of each stock to visualize their distribution. Ensure that each histogram has appropriate titles and axis labels. e. Interpretation (20p) Analyze the histograms and descriptive statistics to understand the distribution of daily returns. Based on your findings, provide a summary of the risk and return profile of each stock. Address the following: Any observed patterns or outliers in the distribution. How do the mean returns and standard deviations compare among the stocks? What can you infer about the riskiness of each stock based on its volatility? f. Comparative Analysis (15p) Compare and contrast the risk-return profiles of the stocks in your portfolio. Which stock appears to be the most or least volatile, and how might these characteristics influence investment strategies?
Daily Stock Return Analysis a. Data Download and Preparation (2p) Download historical stock data for Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and IBM from Yahoo Finance for the past 5 years, covering the period from September 1, 2019, to September 1, 2024. Import the data into a spreadsheet and ensure the dataset includes the daily adjusted closing prices for each stock. b. Daily Returns Calculation (3p) Compute the daily returns for each stock using the formula: Daily Return = (Current Price /Prior Period Price) – 1 Express the daily returns as percentages. c. Descriptive Statistics (10p) For each stock, calculate fallowing statistics for daily returns: Mean Daily Return: The average daily return. Standard Deviation of Daily Returns: A measure of the volatility of daily returns. d. Histograms (5p) Create histograms for the daily returns of each stock to visualize their distribution. Ensure that each histogram has appropriate titles and axis labels. e. Interpretation (20p) Analyze the histograms and descriptive statistics to understand the distribution of daily returns. Based on your findings, provide a summary of the risk and return profile of each stock. Address the following: Any observed patterns or outliers in the distribution. How do the mean returns and standard deviations compare among the stocks? What can you infer about the riskiness of each stock based on its volatility? f. Comparative Analysis (15p) Compare and contrast the risk-return profiles of the stocks in your portfolio. Which stock appears to be the most or least volatile, and how might these characteristics influence investment strategies?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Daily Stock Return Analysis
a. Data Download and Preparation (2p)
-
- Download historical stock data for Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and IBM from Yahoo Finance for the past 5 years, covering the period from September 1, 2019, to September 1, 2024.
- Import the data into a spreadsheet and ensure the dataset includes the daily adjusted closing prices for each stock.
b. Daily Returns Calculation (3p)
- Compute the daily returns for each stock using the formula:
Daily Return = (Current Price /Prior Period Price) – 1
- Express the daily returns as percentages.
c. Descriptive Statistics (10p)
- For each stock, calculate fallowing statistics for daily returns:
- Mean Daily Return: The average daily return.
- Standard Deviation of Daily Returns: A measure of the volatility of daily returns.
d. Histograms (5p)
- Create histograms for the daily returns of each stock to visualize their distribution. Ensure that each histogram has appropriate titles and axis labels.
e. Interpretation (20p)
- Analyze the histograms and descriptive statistics to understand the distribution of daily returns. Based on your findings, provide a summary of the risk and return profile of each stock. Address the following:
- Any observed patterns or outliers in the distribution.
- How do the mean returns and standard deviations compare among the stocks?
- What can you infer about the riskiness of each stock based on its volatility?
f. Comparative Analysis (15p)
- Compare and contrast the risk-return profiles of the stocks in your portfolio. Which stock appears to be the most or least volatile, and how might these characteristics influence investment strategies?
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