From the course: Excel for Investment Professionals
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Computing arithmetic and geometric returns in a portfolio - Microsoft Excel Tutorial
From the course: Excel for Investment Professionals
Computing arithmetic and geometric returns in a portfolio
- [Instructor] As an investor, one of the most critical tasks you face is going through and computing performance statistics on your portfolio. Two common performance statistics you'll probably want to be familiar with are the arithmetic mean and the geometric mean. Let me show you how those are computed in Excel. I'm in the 03_03_Begin Excel file. Now, what we have here are two different assets, asset number one, and asset number two, and their returns throughout the year 2019. For asset number one, its returns start off relatively weak. It loses 3.6% in January before bouncing back for several months and then losing more money during the middle of the year. In order to go through and compute the arithmetic mean, we would simply use the AVERAGE function and select all of the numbers in question. Now let's try doing this for asset number two. So in this case, I'm going to use the AVERAGE function, and I'm going to select all of the return statistics that I'm interested in. Now, what…
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Contents
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Computing expected returns on a stock2m 55s
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(Locked)
Using probability to calculate stock returns3m 35s
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(Locked)
Computing arithmetic and geometric returns in a portfolio3m 19s
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(Locked)
Computing standard deviation and variance of an asset4m 41s
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(Locked)
Finding covariances and correlations5m 6s
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(Locked)
Computing standard deviation and variance of a portfolio3m 12s
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(Locked)
Computing beta of an asset4m 33s
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(Locked)
Computing risk for a portfolio with many stocks3m 33s
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