Portfolio Assignment Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Portfolio Assignment Case Solution

Introduction

The case discusses the analyses of particular asset classes through determining the stocks of the companies. Under the scenario, it has been identified that six asset classes under different industries are selected and are hence used to analyze the risk factors associated with the investment under each stock.

Under the process of determining the optimal solution to the portfolio, it shows that every industry indicates some risk factor and shows the expected rate of return determined through the historical prices as well. While on the other side, it indicates that there would be various opportunities for the investors to weight the stock through non-equal investments in order to minimize the unsystematic risk associated with a particular portfolio.

Under the case, all the companies are selected from NYSE 500 index, and data is collected from Bloomberg as well in order to analyze the desired results that a portfolio would give the solutions to. Therefore, to determine the risk and return, three types of technical analyses have been used in order to identify which model would perform better and can be attractive for the particular investors.

The first model to apply for portfolio optimization is the use of moving averages that consists of 3 days, 6 days, and 12 days of average prices of each class. It also shows how much volatility each stock would bear within a particular period and also analyze the risk factor associated with high volatility.

The second technique is the use of the volume by price model, this shows the relationship between the price and the quantity. It also indicates that more quantity would involve more price fluctuations due to the heavy amount invested in stock by the investors. Therefore, it means that this model would also provide relevant information regarding the long-term investment by the particular investors.

The third technique is applying the volatility analysis, which shows the least changes in the prices and considers the standard deviation as well, which would contribute as a major factor to decide for the investment. Therefore, all three models would provide various pictures and illustrate their importance of whether the investors would prefer or not.

It shows from the following pattern that the average rate of return and risk can be calculated and provide the information to the investors regarding the decision they would make for the long-term and consider the weighted invested stock as well due to various returns of the companies under the investment. In conclusion, either of the selected models would provide a better picture for the investors.

Use of Moving averages

From the following analysis, it is determined that six asset classes have been selected in order to analyze the price volatility through the use of moving averages for three days, six days as well as for 12 days. Therefore, every asset class in the case generated the chart in order to know how much prices would change the given period.

3 M Company

The results from the following analysis show that there is a moderate volatility in the prices of the company. However, the moving averages garnered through the use of 12 days show better results than using the other two approaches and this indicates that less risk is involved within a particular asset class.

The Boeing Company

Under the scenario of a particular asset class, the results indicate that prices show high volatility as compared to other asset classes due to a high quantity of the stocks as well as high prices. Therefore, this shows that investing in stock can bear some risks for long-term...........................

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