Need help with my writing homework on Investment Portfolio for Investors and Executives Analysis. Write a 1250 word paper answering; From the data, volatility is a measure of variation in the average trajectory leading to a risk. BOQ stocks have the highest variation at 27.08%. This implies that there is an increase in the interests hence the frequency of financial data is high leading to high volatility. HVN stocks have high volatility, as well. There is a decrease in volatility where BHP and ANZ stocks are low indicating a returns pattern which is in a stochastic process. As a result of nonparametric analysis, the pattern in the volatility changes because of financial returns making the volatility of WOW and ASX300 low.
The rate of returns of TLS stock is high because the risk is considerable. ANZ and BHP follow as there expectation of growth is low due to high risk. BOQ and HVN stocks have a low growth rate expectation because they have a high risk unlike the rest of the stocks.
All the stocks have a negative skewness where TLS has the most negative skewness. This is because of the risk while HVN has a negative skewness because the risk is low. TLS stocks have a high measure of kurtosis, due to high risk expectation while BOQ has a low measure of kurtosis because of the risk and growth rate being low.
HVN Company shows a negative Mu while the volatility is positive, this applies for BOQ, BHP and WOW. There is a positive Mu for ANZ and TLS as well as the volatility. The results provide grounds for future decision making as well as the future behavior of the stock. The observations are constant at 531 from 2010 to 2012.
Analysis of alpha and beta
Alpha is the measure of the residual risk, where in the data BHP, ANZ and TLS stocks have a high residual risk while HVN, BOQ and WOW stocks have a low residual risk. Beta is how sensitive the stock returns are to the outcome on the index of the market. The sensitivity of HVN stock is between zero and one implying that there is an investment having low volatility. BOQ, HBP and ANZ stocks are above one implying that the volatility of the stock is more than index. ASX300 stocks have a beta equal to one implying that there is a matching index (Prime, 2007).
On the basis of detailed examination concerning each stock situation in ASX300, the security from each different section has makes contributions that vary to the investment income.