Two-Asset Portfolio Risk: Excel in Finance

Here we We learn about Two-Asset Portfolio Risk. We illustrate how to calculate the average return, variance, standard deviation, covariance, and correlation of two stocks using EXCEL. We then demonstrate how the volatility of a portfolio can vary, depending on how certain of these measurements change. Secondly, we use Excel to illustrate how changes in the annual returns for Stock B impact average return, variance, standard deviation, covariance, and correlation. We then demonstrate how the volatility of a portfolio can vary when these measurements change.