Stock Return Analysis Worksheet
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Using your 4 stocks selected for the initial think or swim portfolio, download 61 months of adjusted prices from finance.yahoo historical prices.
For each stock:
i. calculate one month’s returns for 60 months.
ii. find the 60-month risk free rate, use the index ^irx, each month is an annual return, so to convert to monthly divide by 1200,
iii. Calculate each stock’s beta from the data, assume the market is the S&P 500, recall to find beta we use the excess returns (i.e., monthly returns less the risk-free return, and regress on the market excess returns)
iv. find the return for 2019 (i.e, the one-year holding period return), compare the return to the expected one year return using the CAPM,
v. was the stock over or undervalued relative to the CAPM?
vi. upload your excel with your data and calculations, include your commentary in the excel file
