Portfolio (60%-40%) of Bonds and Stocks in the Greek Market, calculating average return and expected volatility
In this excercise I developed a Portfolio tha consists 60% Bonds and 40% Stocks that operate in the Greek Market. The Bond that I used was the Greek 10Yr Government bond, that represents the risk free rate of the economy. Regarding the stock portfolio I picked companies from different industries such as Energy, Construction, Transportation and more.
In my analysis I tryed to find the optimal weights for each stock in the portfolio, by maximizing the function "E(Rp) - 1/2gammaVar(Rp)
In specific E(Rp) is the expected return of the portfolio = weighted Expected return of each stock Expected return of each stock = average yearly return from 2017 onwards
Assuming an Investor with 10.000 euros, the investor will buy 6.000 euros worth of government bonds (58 Bonds) while for the stocks the investor will take the remaining individual weights.
In general the Portfolio has an expected yearly return of 8.81% and a volatility of 6.9%