# Load packages

# Core
library(tidyverse)
library(tidyquant)

Goal

Collect individual returns into a portfolio by assigning a weight to each stock

from 2012-12-31 to 2017-12-31

1 Import stock prices

symbols <- c("X", "CMC", "ZEUS")
prices <- tq_get(x  = symbols,
    get = "stock.prices", 
     from = "2012-12-31",
      to  = "2017-12-31")

2 Convert prices to returns (quarterly)

asset_return_tbl <- prices %>%
    
    group_by(symbol) %>%
    
    tq_transmute(select     = adjusted, 
                 mutate_fun = periodReturn, 
                 period     = "quarterly", 
                 type       = "log") %>%
    
    slice(-1) %>%
    
    ungroup() %>%

set_names(c("asset", "date", "returns"))

3 Assign a weight to each asset (change the weigting scheme)

symbols <- asset_return_tbl %>% distinct(asset) %>% pull()
symbols
## [1] "CMC"  "X"    "ZEUS"
weights <- c(0.4, 0.3, 0.3)
weights
## [1] 0.4 0.3 0.3
w_tbl <- tibble(symbols, weights)
w_tbl 
## # A tibble: 3 × 2
##   symbols weights
##   <chr>     <dbl>
## 1 CMC         0.4
## 2 X           0.3
## 3 ZEUS        0.3

4 Build a portfolio

portfolio_returns_tbl <- asset_return_tbl %>%
    
    tq_portfolio(assets_col = asset, 
                 returns_col = returns,
                 weights = w_tbl,
                 rebalance_on = "quarters")

portfolio_returns_tbl
## # A tibble: 20 × 2
##    date       portfolio.returns
##    <date>                 <dbl>
##  1 2013-03-28          -0.00760
##  2 2013-06-28          -0.0484 
##  3 2013-09-30           0.145  
##  4 2013-12-31           0.197  
##  5 2014-03-31          -0.0492 
##  6 2014-06-30          -0.0933 
##  7 2014-09-30           0.0648 
##  8 2014-12-31          -0.173  
##  9 2015-03-31          -0.109  
## 10 2015-06-30           0.0284 
## 11 2015-09-30          -0.437  
## 12 2015-12-31          -0.0252 
## 13 2016-03-31           0.422  
## 14 2016-06-30           0.154  
## 15 2016-09-30          -0.0433 
## 16 2016-12-30           0.318  
## 17 2017-03-31          -0.122  
## 18 2017-06-30          -0.103  
## 19 2017-09-29           0.0759 
## 20 2017-12-29           0.137

5 Plot: Portfolio Histogram and Density

portfolio_returns_tbl %>%
    
    ggplot(mapping = aes(x = portfolio.returns)) + 
    geom_histogram(fill = "cornflowerblue", binwidth = .035) + 
    geom_density() + 
    
    # Formatting
    scale_x_continuous(labels = scales::percent_format() )

    labs(x = "returns",
         y = "distribution", 
           title = "Portfolio Hisotgram and Density")
## $x
## [1] "returns"
## 
## $y
## [1] "distribution"
## 
## $title
## [1] "Portfolio Hisotgram and Density"
## 
## attr(,"class")
## [1] "labels"

What return should you expect from the portfolio in a typical quarter?

I would expect a negative return from this portfolio as historically there has been negative returns as a majority. I would suspect this is due to the fact his is not very diversified portfolio where all of these stocks are from the same industry.