1. New stocks
What are the conclusions so far on the existing portfolio?
2. Conclusions so far
It has been doing relatively well since 2010. The value increased by 100% over the course of 7 years.
3. Conclusions so far
We also observed that the performance was really good between 2010 and 2014 but
4. Conclusions so far
since the end of 2014 the portfolio did not make any money. Instead it oscillates around the same value for the last 2 years. Finally we saw that the average daily return was very close to 0 with some days of very good or very poor performance.
The goal is now to choose a stock that improves the overall portfolio characteristics. It can mean improve average daily return but as mentioned earlier, it is above everything about capital preservation. In simple statistical terms, this could be translated into: find the stock that experienced relatively good performance and is the least correlated with your existing portfolio.
5. In what follows...
In what follows you will be first introduced to a new dataset containing stocks that are not in your existing portfolio. Then you will be asked to choose only one stock and finally you will compare your old and new portfolio.
6. Let's practice!
Choose this new stock wisely!