Investment Planning: Asset Relocation 3

Table 1: Portfolio that consists of 13 components (share and unit trust)

1st Step: Collect historical adjusted price from Yahoo Finance. Adjusted price is the corrected price after considering the dividend and share split. You need to spend some time in evaluating the reliability of the adjusted price in the event of after share split.

Table 2: Variance and Covariance Matrix for the Portfolio

Step 2: Variance and covariance calculation.

Table 3: Portfolio Return (current), Portfolio Return (optimized) and Sharpe Ratio Calculation

3rd step: Calculation portfolio weightage. Then calculate Portfolio Return (current), Portfolio Return (optimized) and Sharpe Ratio.

4th step: Solver setup with several desired constrains

Next time I will discuss about the implication of the model with different scenario.