I am analyzing my personal portfolio, exploring the stocks that performed well and the ones that didn’t. Using financial data from a calendar year, what is the optimal asset allocation percentages among the top stocks.
All data was pulled from Yahoo Finance. Data was pulled for the 2021 calendar year. An example of the data is shown below.
## LTC.Close SLY.Close SPLV.Close EQIX.Close NOBL.Close AWK.Close
## 2021-01-04 37.77 78.73 55.58 692.56 78.62 150.24
## 2021-01-05 37.94 80.42 55.75 691.54 79.19 151.09
## 2021-01-06 39.20 84.40 56.22 668.96 81.07 152.36
## 2021-01-07 38.71 85.34 56.43 678.97 81.35 152.13
## 2021-01-08 39.33 84.67 56.65 692.46 81.30 156.98
## 2021-01-11 38.94 84.97 56.39 682.39 81.19 156.64
## ABR.Close V.Close SHV.Close
## 2021-01-04 13.82 217.76 110.52
## 2021-01-05 13.96 214.51 110.52
## 2021-01-06 14.35 212.62 110.53
## 2021-01-07 14.32 213.81 110.53
## 2021-01-08 14.21 215.45 110.52
## 2021-01-11 14.23 212.89 110.51Using the calendar year data, I calculated the annual return and the standard deviation for each investment. This information will provide useful as we can use these straightforward metrics to update our stock allocations for the next year using past performance data.
## stocks Return SD
## 1 LTC -9 % 3.76902034
## 2 SLY 26 % 4.15808633
## 3 SPLV 23 % 3.28553017
## 4 EQIX 22 % 65.53104556
## 5 NOBL 25 % 4.99364248
## 6 AWK 25 % 12.78416255
## 7 ABR 33 % 1.47139765
## 8 V 0 % 12.87349569
## 9 SHV 0 % 0.03298906Given the figures related to returns and standard deviation, I’d sell my SHV shares and allocate more of my portfolio towards AWK. SHV had a 0% return for the year and its deviation is almost 0, which communicates that the price of this stock tends to stay constant. AWK had a great annual return for 2021, an impressive 25%, with a deviation of around 13 there is movement in the stock price and potential for it to increase more.