The monthly mean and volatility
You have now created month to month returns for the S&P 500. Next, you will need to do a descriptive analysis of the returns.
In this exercise, you will calculate the mean (arithmetic and geometric) and volatility (standard deviation) of the returns. These returns are available in your workspace as the variable sp500_returns.
This exercise is part of the course
Introduction to Portfolio Analysis in R
Exercise instructions
- Compute the arithmetic mean value of the return series.
- Compute the geometric mean value of the return series using
mean.geometric(). - Compute the standard deviation of the return series.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Compute the mean monthly returns
# Compute the geometric mean of monthly returns
# Compute the standard deviation