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April 26, 2024, 10:24:24 pm
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Author Topic: Calculating the standard deviation of your portfolio  (Read 5284 times)  Share 

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QuantumJG

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Calculating the standard deviation of your portfolio
« on: April 01, 2010, 08:42:44 pm »
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Hey guys,

There is an assignment question asking for you to calculate the standard deviation of the investor's portfolio, but, there is no formula!

How do I do this?
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dcc

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Re: Calculating the standard deviation of your portfolio
« Reply #1 on: April 01, 2010, 08:45:52 pm »
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Cthulhu

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Re: Calculating the standard deviation of your portfolio
« Reply #2 on: April 01, 2010, 08:47:03 pm »
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Hi there.
Here is a helpful page on calculating the standard deviation
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QuantumJG

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Re: Calculating the standard deviation of your portfolio
« Reply #3 on: April 01, 2010, 08:48:19 pm »
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Quote from: dcc on April 01, 2010, 08:45:52 pm


Oh thanks, but its not the formula I'm looking for.
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/0

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Re: Calculating the standard deviation of your portfolio
« Reply #4 on: April 01, 2010, 08:49:37 pm »
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Perhaps you mean this?



(Still, the other formula seems to be computationally simpler, why not use it?)
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dcc

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Re: Calculating the standard deviation of your portfolio
« Reply #5 on: April 01, 2010, 08:56:30 pm »
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You must mean , if we make a few trifling assumptions about your portfolio.
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Edmund

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Re: Calculating the standard deviation of your portfolio
« Reply #6 on: April 01, 2010, 09:05:24 pm »
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/0 has got the formula spot on :P

What you need to do now is find and sub in the individual standard deviations as well as the weighted averages you previously found and read off the correlation figures from the table few pages back. This allows you to find the standard deviation of the whole portfolio.

Really have to run off now, friend arrived to pick me up ;)

If I come back drunk, I'll look at it tomorrow ;D
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