Finance Portfolio Management for Apple - MyAssignmenthelp.com

Question: Discuss about theFinance Portfolio Management for Apple. Answer: After the overall evaluation of total risks involved in different stocks and the portfolio, it could be understood that .Total risk of Apple, coca cola, Johnson Johnson and their existing portfolio is mainly evaluated to understand the overall risk structure of these stocks. Both systematic and unsystematic risk of Apple is relatively higher than Coca Cola and Johnson Johnson. This could maybe help in identifying the risk from investment in Apple stock that is relatively higher, and could increase the total risk of the portfolio[1]. However, in composition to the percentage contribution of systematic and unsystematic risk it could be evaluated those mothers to stocks as a relatively higher composition of unsystematic risk than the systematic risk. Where systematic risk is is relatively higher in Apple in comparison with other stocks. This higher composition of unsystematic risk in all the three stock mainly increased the systematic risk in the portfolio where 66% of the portfolio c onsists of unsystematic risk while 34% is systematic risk. The overall calculation that was conducted to identify the beta, alpha and R2 All the socks and Portfolio it would help in identifying the minimum risk portfolio, which could provide an adequate return. Using the overall Alpha of the three stocks is relatively positive while beta is adequate. The Alpha and beta of the portfolio is relatively higher than stocks indicating a constant come that could you provided from the portfolio. Thus, stock prices on Jensens Alpha are not negative which allows the overall return from investment possible. Some of the researchers mentioned that use of Beta and Alpha allows investors to effectively draft combined defensive stocks, which could help in reducing in the risk from investment, and attain higher profitability[2]. The overall comparison of Arithmetic mean and variance for different companies are mainly conducted to understand contribution regarding the risk and return factor of stocks. Currently the overall Arithmetic mean of Apple is at 0.8448% with its variance at 0.0413%. This mainly indicates that Apple is contributing the highest risk, which has entitled the company to produce a higher return from the investment. However, all Arithmetic mean of Johnson and Johnson is mainly at 0.2405% with a variance of 0.0331%. Only indicates that Return from investment has relatively high risk from investment. The performance of Johnson Johnson is relatively poor against the comparison of SP 100, as the return is relatively low from the market. In addition, the Arithmetic mean of Coca Cola Company is mainly at 0.1568% with a radius of 0.1656%, which indicates that the company has a lower risk and return profile from the market. This mainly indicates that the overall return generated from Coca Cola and Johnson Johnson could not help in providing the adequate return from investment. In accordance with the risk and return profile, Apple contributes to the highest risk and provides the highest return from an investment, Therefore inconsistency with the overall alpha, beta, Arithmetic mean, and waiting of all this tree stock may lead effect reliability to conjure an effective portfolio. Effectiveness of the Analysis After analysing the overall portfolio consisting of the latest stocks such as apple Johnson Johnson and coca cola evaluated, which helps in identifying the relevant risk Associated with investment. The overall evaluation of Apple stock mainly indicates a constant and come with the Rising risk from investment. In addition, the valuation of beta and Alpha mainly helps in identifying the overall return, which might be provided from an investment.Apple having a higher beta also provides a higher return from investment. In addition both Johnson Johnson and Coca Cola, company has a relatively moderate beta, which helps in reducing your address from investment. Thus, the old portfolio risk is below 1, which indicates less sensitivity of the portfolio with the changing volatile market. Therefore, it could be understood that investing in Apple, Coca Cola, and Johnson Johnson could eventually help in increasing its overall return and reduce risk from investment. Consequently, it would be ad vised that investors could effectively use the portfolio and accordingly invest in the market, which could help in maintaining an adequate flow of investment[3]. Limitation of Analysis: Major limitation of the analysis is mainly the focus on risk, which is conducted to identify the relevant portfolio that could be used by an investor. The overall analysis mainly depicts the use of 3 stocks and does not provide any kind of Link which might provide indication of the minimum amount of investment that means to be conducted.This limitation mainly reduces the overall risk factor, which might reduce investment. Furthermore, the analysis does not focused on the potential benefits that might be provided from in investment after analysing it over.Analysis is mainly divided between the two segments where the investor is risk taker or risk adverse. This Limited evaluation of the analysis mainly reduces the actual benefit that might be provided from an investment. Moreover, the data used in the research is mainly on weekly basis, which increases the chance of not detection of the overall in the market.Computation of daily returns could eventually help in identifying the overall risk and return attribute of a stock, which could help in making adequate investment decisions. The limited approach of research mainly increases the overall violation that might be conducted in deriving weekly risk and return of a company. Lastly according to the efficient market hypothesis whole data is effectively observed in the price structure of a stock, and does not provide any kind of future evaluation. in addition according to the theory future predictions regarding price movement could not be conducted for as it is already included in it. Future Research: The future research will be focused on the daily returns regardless of the weekly returns, which are calculated in the current valuation. The evaluation of daily returns could eventually help in identifying any kind of risk, which might be associated with Investments. The current rates that is been used in the portfolio is provide a consistent return from investment with reduced beta which could only be improved if daily return are been evaluated.Future research cool also consists of several factors that might be included in the portfolio to increase relevancy and reduce any kind of risk from investment. The future search you also include risk free rate and table to effectively increase we relevancy and identify the actual related to one investment[4]. Reference: Archibald, Russell D., and Shane Archibald.Leading and Managing Innovation: What Every Executive Team Must Know about Project, Program, and Portfolio Management. CRC Press, 2016. Beringer, Claus, Daniel Jonas, and Alexander Kock. "Behavior of internal stakeholders in project portfolio management and its impact on success."International Journal of Project Management31, no. 6 (2013): 830-846. Klingebiel, Ronald, and Christian Rammer. "Resource allocation strategy for innovation portfolio management."Strategic Management Journal35, no. 2 (2014): 246-268. Turner, J. Rodney.The handbook of project-based management. Vol. 92. New York, NY: McGraw-hill, 2014.