Got a tricky question? Receive an answer from students like you! Try us!

investment management strategies - Essay Example

High school
Author : zgreenholt
Essay
Miscellaneous
Pages 8 (2008 words)
Download 1

Summary

The objective of this paper is to compare the performance of two portfolios: A U.S portfolio consisting of six Stocks (Citigroup Inc., American Express Company, Motorola Inc., Boeing Co., McDonalds Corp., and Coca-Cola Co.); and an Australian Portfolio consisting of Westpac Banking Corp, ANZ Banking Group Ltd., Rio Tinto Ltd., BHP Billiton Ltd., QBE Insurance Group Ltd, and Qantas Airways Ltd.

Extract of sample
investment management strategies

The correlation coefficient between the daily stock return in each portfolio is also calculated and combined with the standard deviations in a covariance matrix to calculate the variance and standard deviation for each portfolio. Sensitivity analysis is also carried out by changing the weights of each stock in the portfolio to see how the performance changes.
The variance and thus the standard deviation are far more difficult to calculate because the variance of a portfolio is not simply a weighted average of the individual variances of the stocks included in the portfolio except for the special case where the individual stock returns are uncorrelated with one another. The variance for a two stock portfolio is given by:
We need to set up a covariance matrix to bordered covariance matrix to be able to calculate the 1variance and standard deviation for a portfolio of more than two stocks. For a three stock portfolio the bordered covariance matrix can be written as follows (Bodie et al., 2002):
The portfolio variance is calculated from the above nine terms by multiplying the bordered weights by the corresponding covariance and then summing the different terms. ...
Download paper
Not exactly what you need?

Related Essays

Management Strategies
This can, in part, be contributed to past analysis which has effected in a study of decision making behaviour. This analysis by various scholars has depicted the fact that decisions regarding risky organisational decisions brings out contradictory reactions. Here, we can find the essence of the dichotomy that risk taking strikes as a major aspect of business activities. Risk, in case of such decisions, is seen as a focus of single determinants of behaviour arising from risk theories. Although this approach does not conform to real life situations in an obvious fashion, it has led to…
7 pages (1757 words)
Strategies for Change Management
The fourth explanation defines change management as a control mechanism. (Nickols (2008)…
2 pages (502 words)
To advise on a suitable investment portfolio and investment management strategy.
uilding, specifically of a denomination with an Episcopal hierarchy (such as the Roman Catholic Church or the Anglican churches), which serves as the central church of a bishopric. As cathedrals are often particularly impressive edifices, the term is sometimes also used loosely as a designation for any large important church. (en.wikipedia.org/wiki/Cathedral)…
6 pages (1506 words)
Investment Strategy and Portfolio Management
The competition is very tough and the company finds it difficult to compete with others. (Blake 2000).The investment form the customers are the basis for running such institutions. Only if the contributors are more and they get attracted with the institution, they will deposit more funds. To attract the contributors and increase the inflow, the company must follow new policies and strategies.…
8 pages (2008 words)
INVESTMENT AND PORTFOLIO MANAGEMENT
The investor who prefers to bank his funds to generate a fixed ‘certain’ interest at the end of a term is the classic case of risk-averse individual while a casino gambler who bets against high ‘uncertain’ odds is at the other end of the spectrum (Pietersz, 2009).…
8 pages (2008 words)
analysis of investment and management of portfolio
The following part of the paper presents a detailed SWOT analysis and Porter’s five forces analysis of the Keppel Land Limited.…
5 pages (1255 words)
the Module called (investment) Topic: Investment and Portfolio Management
The deviation may lead to the management of the fund with in depth analysis regarding the price movements of the stocks or bonds, which are managed under fund (Swensen, 2009). There has been a long debate on the structuring and management of the fund. The fund can be either actively managed or passively managed. Some researchers argue that the active management is more suitable for the high risk investors. On the other hand, some argue that passive management is considered to be sustainable and reasonable investment. The base of such arguments moves around the concept and belief about the…
14 pages (3514 words)