Investment Analysis and Portfolio Management | Report

Running head: INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
Investment Analysis and Portfolio Management
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INVESTMENT MANAGEMENT AND PORTFOLIO MANAGEMENT1
Table of Contents
Introduction......................................................................................................................................2
Discussion and Analysis..................................................................................................................2
Historical Data.............................................................................................................................2
Investment Opportunity Set.........................................................................................................3
Efficient Frontier.........................................................................................................................5
Minimum Variance Portfolio.......................................................................................................7
Diversification in Portfolio..........................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

INVESTMENT MANAGEMENT AND PORTFOLIO MANAGEMENT2
Introduction
The financial analysis of the stock prices of the company has been well done for the
purpose of well analyzing the stock returns that have been generated by the company. The
companies have been well analyzed for a sum of five years in which the changes have been well
kept into consideration with respect to the price trend observed. The analysis of the stocks has
been done from a portfolio perspective in which we have analyzed the appropriate weights that
should be ideal for the stocks for the purpose of investment. Risk and Return are the key
important characteristics of an investment and the same has been well analyzed based on the
given set of criteria for the portfolio designed. The application of diversification has been well
discussed from the application of portfolio management and how the same can well result in the
reduction of the overall risk that is associated with a portfolio (Benedetti et al., 2019).
Discussion and Analysis
Historical Data
The stock price of different companies have been well selected for a sum of five years
whereby monthly changes have been well recorded down. The monthly closing prices has been
well considered for a sum of five years in which both the company average monthly return as
well as annual return has been calculated. In order to view and analyze the risk associated with
the same the Standard deviation for both the stocks were analyzed on a monthly and annual
basis. The data for both the stock prices have been well considered from a period of January
2015 to December 2019 (Tu et al., 2019). The annualized mean return for UOB was calculated to
be around 3.58% and for Wilmar International it was calculated to be around 5.90%. From a

INVESTMENT MANAGEMENT AND PORTFOLIO MANAGEMENT3
return basis it can be well seen that Wilmar International has provided a comparative better set of
returns. From a risk perspective showing the movement or the volatility in the data set captured
by the Standard Deviation for the stock has been around 18.39% for UOB and was around
21.15% for Wilmar International. The return to risk ratio for UOB has been around 0.23 and for
Wilmar International the same has been around 0.33 times. The ratio well depicts the amount of
return that the stocks is generating for a single unit of risk that is taken by the investors (Padma
and Rambabu 2017). The ratio has been rewarding for the investors in the case of Wilmar
International. Correlation on the other hand, well helps the analyst and portfolio manager well
asses the relationship that is associated between two data sets that would be further used or
utilized for portfolio perspective. The correlation between the stocks has been around 0.53 times,
this go to well shows that the stocks returns are not closely related with each other. However, it
is important to note that at the same time that a correlation of 1 or close to 1 well implies that the
relationship between the two data set observed is strong and in turn could affect the portfolio
creation and analysis process (Davis 2018). Stocks which have high correlation or correlation
close to 1 goes to well show that portfolio creation would not be benefitting the investors at all.
Investment Opportunity Set
The Investment Opportunity Set goes to well show the number of choices or alternatives
that are well available with an investors for the purpose of investing. All of the investments that
an investors can well make with the change in the weights of stocks in the portfolio is well
marked by IOS (Shimizu and Shiohama 2019). The opportunity set goes to well show the set of
all portfolio that one can well construct with the help of given asset class (Branch, Goldberg and
Hand 2020). Investors can well create portfolio based on high or low risk with the help of
presented opportunity set. The set of weights which gives the investors with the highest amount