Minimum Variance Portfolio Assignment Example | Topics and Well Written Essays - 500 words

Minimum Variance Portfolio - Assignment Example It shows the rates of stock for a year running. This MVP analysis was be preceded by the calculation of correlation matrix of the stocks as well as their standard deviation variance. Both this values are indicated in the Microsoft Excel attachment. During the calculation of the correlation matrix and the standard deviation variance, maple concepts were used. This section of the paper is going to test and prove the validity of the procedures and statements used in order to ascertain that no syntax errors were committed during the process. This can be proven as follows: Use of the colon and comma: in maple, statements must end with a colon and arguments separated with a comma (Monagan, Geddes et al., 14).For instance, during the development of correlation, for example, inStandard Life stock, we use the formula =CORREL(N3: JF3, N3: JF3). The comma shows the distinction between the two arguments while the colon relates one variable to the other. Use and match of parentheses: a maple can only be executed if the arguments are enclosed in parentheses. The opening parenthesis must be similar to the closing one(Monagan, Geddes et al., 19). In the attached case, all the males have the parentheses () matching in all stocks. The syntax provided is an M X M square matrix of stocks, as shown in the attachment. The correlation coefficient between i and j (for example between Standard Life and Resolution) is given by the (in) element. All diagonal elements are 1.0000 since this is a correlation of variables with themselves(Monagan, Geddes et al., 59). Divide the value of each stock with its proceeding one and subtract one from the result; which in our instance we are going to take Standard Life as an example. The standard deviation presented on 1/1/2013 is determined as the value of the stock on 1/1/2013 divide by the value of 31/12/2012 and subtract one from the result. Mathematically, this is: (332.1/334.6) – 1 to get -0.0075. We do the same for the standard deviation of all stocks for each day, and this has been done on the red coloured parts of the Excel attachment that extends from cell N3 to cell JG3.  Ã‚