# Load packages

# Core
library(tidyverse)
library(tidyquant)

Goal

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

Choose your stocks.

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

1 Import stock prices

symbols <- c("TSLA", "NVDA", "GOOGL", "ORCL", "JNJ")
prices <- tq_get(x = symbols, 
                 from = "2019-12-31", 
                 to = "2024-12-31")

2 Convert prices to returns (quarterly)

asset_returns_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
symbols <- asset_returns_tbl %>% distinct(asset) %>% pull()
symbols
## [1] "GOOGL" "JNJ"   "NVDA"  "ORCL"  "TSLA"
# weights
weight <- c(0.25, 0.25, 0.2, 0.2, 0.1)
weight
## [1] 0.25 0.25 0.20 0.20 0.10
w_tbl <- tibble(symbols, weight)
w_tbl
## # A tibble: 5 × 2
##   symbols weight
##   <chr>    <dbl>
## 1 GOOGL     0.25
## 2 JNJ       0.25
## 3 NVDA      0.2 
## 4 ORCL      0.2 
## 5 TSLA      0.1

4 Build a portfolio

# ?tq_portfolio

portfolio_returns_tbl <- asset_returns_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 2020-03-31           -0.0327
##  2 2020-06-30            0.242 
##  3 2020-09-30            0.180 
##  4 2020-12-31            0.120 
##  5 2021-03-31            0.0691
##  6 2021-06-30            0.149 
##  7 2021-09-30            0.0627
##  8 2021-12-31            0.138 
##  9 2022-03-31           -0.0226
## 10 2022-06-30           -0.257 
## 11 2022-09-30           -0.105 
## 12 2022-12-30            0.0208
## 13 2023-03-31            0.217 
## 14 2023-06-30            0.212 
## 15 2023-09-29           -0.0128
## 16 2023-12-29            0.0450
## 17 2024-03-28            0.145 
## 18 2024-06-28            0.128 
## 19 2024-09-30            0.0673
## 20 2024-12-30            0.0751

5 Plot: Portfolio Histogram and Density

portfolio_returns_tbl %>%
    
    ggplot(mapping = aes(x = portfolio.returns)) + 
geom_histogram(fill = "cornflowerblue", binwidth = 0.01) + geom_density() + 
    
    # Formatting 
    scale_x_continuous(labels = scales::percent_format()) +

labs(x = "returns",
     y = "distribution", 
     title = "Portfolio Histogram & Density")

What return should you expect from the portfolio in a typical quarter? In A typical quarter, you should expect a return from right around 0% to about 21%. There are some outlier quarters, the worst being less than -20%, and the best being close to 25%.