PORTFOLIO ANALYSIS

Portfolio Analysis



Portfolio Analysis

Introduction

In the world of business there is a constant change going on what we see today will not be a part of tomorrow's world. Thus, the business needs to cope up with the changing needs of the business so that it can remain ahead of others (Fabozzi & Frank 1985 pp 23). This will help it achieve better position in the market and will earn more benefits than compared to its competitors. Same, is the case with the securities and other financial market investors, they need to thoroughly grill the market in which they are sustaining. This will help them have a better position in the market as they would be better aware of the market conditions.

Better understandings of the markets bring more laurels and benefits for the investors both at individual and group level. Thus, investors need to thoroughly grill the stocks that they are going to invest and built their portfolio on (Fabozzi & Frank 1985 pp 23) (Ross, Stephen and Westerfield, 2009 pp. 102). Better understanding of the stock will also let the buyer know when to invest more and when to exit the stock. What weight age should be given to which stock and what to expect from different stock. They will also be able to better understand the risk related to stocks and the overall market condition in which they are operating.

Standard Deviation

Standard deviation is the measure of dispersion of different set of data from its mean. The higher the data is spread apart in our case the price of stock. The more the standards deviation we are going to see in the price of the stock (Fabozzi & Frank 1985 pp 23). It is calculated as the square root of the variance. Standard deviation highlights the historical volatility in ...