Portfolio Analysis

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Portfolio Analysis 1-6. Our portfolio’s market value as of the closing day was $1,145,263.3. Our portfolio had a 14.53% return, a Sharpe ratio of 0.4113%, and the alpha of 0.042%. By comparing with the S&P 500, our portfolio was outperformance the index by .3501%. Since the Sharpe ratio characterizes how well the return of an asset compensates the investor for the risk taken, the Sharpe ratio is 0.004113 in my portfolio which means the risk premium per unit of deviation is 0.004113. Thus, the low Sharpe ratio in my portfolio indicates that most of the stocks in my portfolio have a very low risk premium. In addition, investors generally want higher Sharpe ratio when comparing with other assets. The Sharpe asset of S&P500 during the period is 0.000612 and the S&P500 represents for the market, it means my portfolio reward-to-risk is higher than the market. The Alpha is a measure of the return on an investment asset which calculates by determining the return in excess of the compensation for the risk borne. In relative to S&P500 date over the period, my portfolio Alpha is 0.000423 which means that my portfolio has an average holding period return higher compared to the S&P500 holding period return. Based on the graphs on the spreadsheet, the portfolio’s performance is better than any other indexes because the average holding period of the portfolio is the highest. The portfolio’s performance is better than other indexes because toward the end of the period, the value of the stock in the portfolio increase dramatically and results in higher jump in holding period as describing below. The securities we purchased on our portfolio were, RAD, MSFT, INTC, XLV, XRT, CCI, BP, PFE, APPL, EXL, CLNE, SLV, GE, ICGE, and AT. The securities contributed greatest profits to portfolio were RAD, MSFT, LOTE, INTC. We earned 37.43% profits from RAD, 23.17% profits from MSFT, 11.44%
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