Stock Portfolio Analysis - Coke and Pepsi

Stock Portfolio Analysis - Coke and Pepsi Term Paper example
Masters
Term Paper
Marketing
Pages 4 (1004 words)
Download 0
Stock Portfolio Analysis Coke and Pepsi Investment in a firm’s stock is usually done with the ulterior motive of earning a profit or good return on the original investment. The earning from a stock is usually measured in terms of the monthly return or annual average return…

Introduction

The annual expected return for Coke is 0.1307, while the annual expected for Pepsi Company is 0.0482. This means that Coke offers an expected higher return for an investor that Pepsi Company. However, the investment that an individual is willing to make is also measured by the risk attached to the investment. The risk that is attached to an investment means the potential variation of actual returns from expected returns, a factor that is measured by the variance and standard deviation of an asset or portfolio. From an analysis of Coke and Pepsi Companies, it is evident that Pepsi has a higher standard deviation and variance, albeit by a small percentage. The standard deviation and variance for Pepsi are 0.048 and 0.0024 respectively, while the standard deviation and variance for Coke are 0.046 and 0.0027 respectively. This means that Pepsi’s stock has a higher deviation from expected return, so an investor who is risk averse would prefer to invest in Coke. The other factor that is used to determine the expected return of a stock is the beta, which refers to the relative volatility of the stock to the market. From the analysis, it is evident that Coke has a higher beta of 0.54 compared to Pepsi’s beta of 0.52, which indicates that Coke’s Stock is more volatile in the market. The covariance of two stocks in a market indicates that extent to which the returns for the two investments move in relation to each other. ...
Download paper
Not exactly what you need?

Related papers

Pest analysis for Pepsi Cola
Once company officers are mutually convinced about the benefits of a marketing audit, both parties have to work together to decide on the coverage, objectives, depth, report format, data sources and the time taken to do the audit. In the case of Pepsi Cola Company, first of all the global market share needs to be determined. The pricing system in this case is determined by the local Pepsi Cola…
Coca-Cola Company,financial analysis from most recent annual report/contrast american coke and mexican coke
?……………………………………………………………………………………7 Financial Statement Analysis: Coca Cola America…………………………………………………………………………….8 Relevant Ratios from Financial Analysis, Trends…………………………………………………………………………….10 Current Financial Climate…
Case analysis - Coke and Pepsi learn to Compete in India
Conclusively the paper would also answer the case study’s three most appropriate questions and therefore would see through it all till the end. Case Analysis: Coke and Pepsi learn to compete in India Coca Cola and Pepsi have been one of the major key players in the beverage industry of India for a long time now and with the economic revolution in this emerging giant since 1994 India has surely…
SWOT Analysis of Coca Cola and Pepsi
This paper seeks to compare and contrast the elements of business adapted by the two soft drinks giants, including PEST and SWOT analyses (Elsbach, 2006). Additionally, the paper analyzes the business culture, performance, and other organizational elements of the two giant organizations. Coca Cola and Pepsi share a similar history: an insignificant business from a simple idea that grows to a…
Financial Analysis about PepsiCo
Today the PepsiCo has a wide and diverse range of edible products and it is one of the largest multinational corporations of the world. As per the financial statements of the company for the financial year 2011, the company has more than 22 mega brands which accounts for more than $1 billion each in annual retail sales. The company has been working diligently on focusing on its strategic targets…
Stock analysis
This includes, but is not limited to, the background of IHG and a brief statement of four special informational events which will be analyzed in depth within this brief response. Accordingly, a literature review will be shown which helps to underscore and elaborate upon many of the specific theoretical interpretations of the methods utilized within this report as well as relate pertinent…
Pepsi Co and Coca Cola Stock Analysis
The report at the end presents the summary of what has been learnt in the report. COMPARING THE STOCK PERFORMANCE OF TWO FIRMS Historical prices of Pepsi co Adjusted closing price has been taken for the calculation of returns and risk. The average stock returns are found to be negative (-0.08) (Yahoo! Finance, 2013a) Historical Prices of Coca Cola Company STDEV 0.0101 The Adjusting closing has…