Goal

Visualize expected returns and risk to make it easier to compare the performance of multiple assets and portfolios.

Choose your stocks.

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

1 Import stock prices

2 Convert prices to returns

3 Assign a weight to each asset

4 Build a portfolio

## # A tibble: 60 × 2
##    date        returns
##    <date>        <dbl>
##  1 2013-01-31  0.0377 
##  2 2013-02-28 -0.0251 
##  3 2013-03-28  0.0228 
##  4 2013-04-30  0.0212 
##  5 2013-05-31  0.00831
##  6 2013-06-28 -0.0257 
##  7 2013-07-31  0.0481 
##  8 2013-08-30 -0.0144 
##  9 2013-09-30  0.0200 
## 10 2013-10-31  0.0457 
## # ℹ 50 more rows

5 Compute Standard Deviation

## # A tibble: 1 × 2
##    Stdev tq_sd
##    <dbl> <dbl>
## 1 0.0507  5.07

6 Plot

## # A tibble: 60 × 2
##    date        returns
##    <date>        <dbl>
##  1 2013-01-31  0.0377 
##  2 2013-02-28 -0.0251 
##  3 2013-03-28  0.0228 
##  4 2013-04-30  0.0212 
##  5 2013-05-31  0.00831
##  6 2013-06-28 -0.0257 
##  7 2013-07-31  0.0481 
##  8 2013-08-30 -0.0144 
##  9 2013-09-30  0.0200 
## 10 2013-10-31  0.0457 
## # ℹ 50 more rows

How should you expect your portfolio to perform relative to its assets in the portfolio? Would you invest all your money in any of the individual stocks instead of the portfolio? Discuss both in terms of expected return and risk.

I would invest my money in Shell, as they as shown have the best chance of making more money than the other companies that I choose. The expected return is the highest while the risk sits lower than them all.